AMERICAN COLOR: Moody's Cuts Probability of Default Rating to D---------------------------------------------------------------Moody's Investors Service downgraded American Color Graphics, Inc's. (ACG) Probability of Default rating to D from Ca , following the company's statement that it has filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code, accompanied by a pre-packaged plan of reorganization, the terms and conditions of which have been accepted by its noteholders. Moody's plans to withdraw all of ACG's ratings shortly.

Details of the rating actions are:

Rating downgraded, subject to withdrawal:

-- Probability of Default rating to D from Ca

Ratings affirmed, subject to withdrawal:

-- Corporate Family rating -- Ca

-- $280 million senior second priority notes due 2010 -- C, LGD5, 78%

Headquartered in Brentwood, Tenneessee, American Color Graphics, Inc. is a leading provider of print and pre-media services. The company recorded sales of $429 million for the LTM period ended Dec. 31, 2007.

AAC GROUP: Gets Consents to Proposed Indenture Amendments---------------------------------------------------------American Achievement Corporation and its immediate parent company, AAC Group Holding Corp. received, as of 5:00 P.M., New York City time, on July 3, 2008, the requisite consents to the proposed amendments to applicable indenture governing certain Notes issued by the companies.

American Achievement got the consent of holders of a majority of American Achievement's outstanding 8.25% Senior Subordinated Notes due 2012 (CUSIP No. 02369AAE8). AAC Group Holding Corp. got the consent of holders of a majority of AAC Group Holding Corp.'s outstanding 10.25% Senior Discount Notes due 2012 (CUSIP No. 000305AB8).

The proposed amendments eliminate or modify substantially all of the restrictive covenants, the obligation to offer to repurchase Notes upon a change of control, certain events of default and related provisions in each indenture and, with respect to Notes for which consents are delivered, require each company to redeem such Notes in connection with the closing of the previously announced transaction between Herff Jones Inc. and American Achievement Group Holding Corp., the indirect parent of American Achievement and AAC Group Holding, if certain conditions are met.

As a result of the receipt of the requisite consents, on July 9, 2008, each company entered into a supplemental indenture incorporating the applicable proposed amendments to the applicable indenture. As a result of the execution of the Supplemental Indentures, withdrawal rights have terminated.

Each company is waiving the requirement that holders deliver their consents prior to the Consent Date in order to be eligible to receive the consent fee. Holders of Notes who validly deliver consents at any time at or prior to the expiration date of 5:00 P.M., New York City time, on July 15, 2008, unless extended, will be eligible to receive the consent fee.

About American Achievement

Based in Austin, Texas, American Achievement Corp. is an indirect wholly-owned subsidiary of AAC Group Holding Corp., which is itself a wholly-owned subsidiary of American Achievement Group Holding Corp. American Achievement Group Holding Corp., AAC Group Holding Corp., and American Achievement Corp. are treated as entities under common control.

American Achievement Group Holding Corp., AAC Group Holding Corp., and American Achievement Corp. manufacture and supply class rings, yearbooks and other graduation-related scholastic products for the high school and college markets and of recognition products, such as letter jackets, and affinity jewelry designed to commemorate significant events, achievements and affiliations. Products are and services are marketed primarily in the United States and operates in four reporting segments; class rings, yearbooks, graduation products and other.

As reported in the Troubled Company Reporter on May 22, 2008, Moody's Investors Service affirmed American Achievement Group Holding Corp.'s Corporate family rating at B3; Probability-of-default rating at B3; and $189 million (current value) senior PIK notes due 2012 at Caa2 (LGD5, 87%).

ADELPHIA COMMS: Settles General Dynamics' $34 Million Claim-----------------------------------------------------------Adelphia Communications Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to authorize and approve a settlement agreement they entered into with General Dynamics Government Systems Corp. and Amroc Investments, LLC, the subsequent purchaser of General Dynamics' Claim No. 89100.

Devon Mobile Communications, L.P., entered into a Master Services Agreement with General Dynamics. Adelphia Communications Corporation, owning 49.9% of limited partnership of Devon, guaranteed the payment of Devon's obligations under the Agreement. However, due to the cessation of the Reorganized Debtors' funding, Devon failed to pay General Dynamics who then filed Claim No. 89100 against the Reorganized Debtors for $34,908,731.

After engaging in extensive negotiations, the parties stipulate that:

a) Claim No. 89100 will be allowed as an other unsecured claim against ACOM for $30,568,000;

b) Within 25 days after the Court's approval of the Settlement Agreement, the Reorganized Debtors will cause all distributions due to Amroc on account of Claim No. 89100 to be made other than the distributions of CVV Interests. The distribution of CVV Interests will be made in August 2008;

c) Amroc and the Reorganized Debtors will exchange mutual releases.

By entering into the Settlement, the Reorganized Debtors note that they will avoid all possible costs that would be incurred if the disputes were to be fully litigated in court.

About Adelphia Comms

Based in Coudersport, Pennsylvania, Adelphia CommunicationsCorporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30states and Puerto Rico, and offers analog and digital videoservices, Internet access and other advanced services over itsbroadband networks. The company and its more than 200affiliates filed for Chapter 11 protection in the SouthernDistrict of New York on June 25, 2002. Those cases are jointlyadministered under case number 02-41729. Willkie Farr &Gallagher represents the Debtors in their restructuring efforts.PricewaterhouseCoopers serves as the Debtors' financial advisor.Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin,Bogdanoff & Stern LLP represent the Official Committee ofUnsecured Creditors.

Adelphia Cablevision Associates of Radnor, L.P., and 20 of itsaffiliates, collectively known as Rigas Manged Entities, areentities that were previously held or controlled by members ofthe Rigas family. In March 2006, the rights and titles to theseentities were transferred to certain subsidiaries of AdelphiaCablevision LLC. The RME Debtors filed for chapter 11protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622through 06-10642). Their cases are jointly administered underAdelphia Communications and its debtor-affiliates' chapter 11cases.

ALESCO FINANCIAL: IndyMac Failure to Cost $86MM Loss on Investment------------------------------------------------------------------Alesco Financial Inc. will record a loss of about $86 million oninvestments in IndyMac Bancorp Inc. debt, the Associated Press reported.

The loss was tied to Alesco's investment in collateralized debtobligations issued by IndyMac, the report added.

IndyMac's banking unit, IndyMac Bank FSB, was seized by the Office of Thrift Supervision on July 11.

Shares of Alesco fell 19 cents, or 13.6%, to $1.19 in morning trading on Tuesday, AP stated. According to AP, earlier in the session, shares hit an all-time low of $1.08.

Alesco shares sold for $1.14 as of the close of trading at the New York Stock Exchange on July 16. The company's shares closed at $1.38 the previous day.

In a press statement, Alesco Financial provided an update on its trust preferred securities portfolio, including the expected impact to AFN of the seizure of IndyMac Bancorp.

In June 2008, IndyMac elected to defer its interest payments on $125 million aggregate principal amount of trust preferred securities held in eight collateralized debt obligation, or CDO, transactions in which AFN is an equity investor.

The IndyMac deferral triggered the over-collateralization tests in five of these eight CDOs. The trigger of an over-collateralization test in a CDO means that AFN, as a holder of equity securities, will no longer receive current distributions of cash in respect of its equity interests until sufficient cash flow is paid to senior debt holders in the CDOs to cure the over-collateralization tests.

Subsequent to the IndyMac deferral, four additional banks elected to defer interest payments on their trust preferred securities, which has resulted in the over-collateralization tests being triggered in two additional CDOs in which Alesco holds equity interests. One of the CDO over-collateralization failures has since been cured, bringing the total number of AFN's CDOs in over-collateralization to six as of June 30, 2008.

AFN expects three of the six affected CDOs to cure theover-collateralization failures and recommence making equitydistributions within 3 to 6 quarters and the other three to do so within 20 to 35 quarters.

These cashflow projections assume zero recovery of principal or interest on any of the currently deferring or defaulted securities and no additional deferrals.

For the year ended Dec. 31, 2007, and the quarter ended March 31, 2008, the six affected CDOs contributed $36.2 million, or 43%, and $8.4 million, or 41%, of AFN's adjusted earnings for such periods.

The aggregate principal amount of trust preferred securities in deferral as of June 30, 2008, is $282.3 million, representing approximately 5.5% of AFN's consolidated trust preferred securities portfolio and an aggregate of $4.5 million in quarterly interest payments to the eight CDOs in which AFN invests, of which AFN's proportionate share is approximately $3.1 million, or about $0.05 per diluted AFN common share per quarter.

AFN anticipates that the seizure of IndyMac will cause AFN to record a realized tax loss of approximately $86 million, which is equal to AFN's proportionate share of the $125 million of IndyMac securities held by the eight CDOs.

The realized tax loss is expected to significantly offset AFN's expected taxable income for the year ending Dec. 31, 2008, including the non-cash income relating to the CDOs that are failing overcollateralization tests as of June 30, 2008.

AFN is evaluating its overall portfolio for changes in fair value in connection with the preparation of its second quarter financial results, which AFN expects to announce on Aug. 5, 2008.

As of June 30, 2008, AFN has available unrestricted cash ofapproximately $120 million. During June 2008, AFN sold a subsidiary that owned approximately $87.5 million notional of credit default swap positions for $70.4 million in cash. As a result of this sale transaction, the $69.3 million of counterparty margin included in AFN's March 31, 2008, unrestricted cash balance is no longer subject to counterparty or market risk.

"The failure of IndyMac is indicative of the stress that the banking sector is under at the time and is likely to be under for the foreseeable future," James McEntee, president and CEO of AFN, said.

"IndyMac's failure has significantly impacted our portfolio; however, as a result of our strong liquidity position, we continue to believe we have the ability to be patient and to manage through these difficult times."

About Indymac Bancorp

Headquartered in Pasadena, California, IndyMac Bancorp Inc.(NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank thatoriginates mortgages in all 50 states of the United States. Indymac Bank provides financing for the acquisition, development,and improvement of single-family homes. Indymac also providesfinancing secured by single-family homes and other bankingproducts to facilitate consumers' personal financial goals. IndyMac specialized in making and selling so-called Alt-A mortgageloans, a category of loans to consumers more credit worthy thansubprime borrowers but typically without the completedocumentation of income or assets necessary to receive a prime-rate loan. The company facilitates the acquisition, development,and improvement of single-family homes through the electronicmortgage information and transaction system platform thatautomates underwriting, risk-based pricing and rate locking viathe internet at the point of sale. Indymac Bank offers mortgageproducts and services that are tailored to meet the needs of bothconsumers and mortgage professionals. Indymac operates throughtwo segments -- mortgage banking and thrift.

The company was ranked the ninth-largest U.S. mortgage lender in2007 in terms of loan volume, The Wall Street Journal says, citingtrade publication Inside Mortgage Finance.

About Alesco Financial

Headquartered in Philadelphia, Alesco Financial Inc. (NYSE: AFN)-- http://www.alescofinancial.com/-- is a specialty finance real estate investment trust (REIT). The company is externally managedby Cohen & Company Management LLC, a subsidiary of Cohen BrothersLLC (which does business as Cohen & Company), an alternativeinvestment management firm, which, since 2001, has providedfinancing to small and mid-sized companies in financial services,real estate and other sectors.

* * *

As reported in the Troubled Company Reporter on May 9, 2008, the company received written notice from the trustees of Kleros Real Estate I, II, and III that each CDO has experienced an event of default. These events of default resulted from the failure of certain additional overcollateralization tests due to credit rating agency downgrades. The events of default provide the controlling class debtholder in each CDO with the option to liquidate all of the MBS assets collateralizing the particular CDO. The proceeds of any such liquidation would be used to repay the controlling class debtholder.

On May 1, 2008, the company received written notice from thetrustee of Kleros Real Estate III that the controlling classdebtholder has submitted a notice of liquidation. Althoughliquidation of the underlying collateral has not yet occurred,once the liquidation process commences the company will no longerable to include the liquidated assets and the related income as acomponent of its REIT qualifying assets and income.

As of May 9, 2008, the controlling class debtholders ofKleros Real Estate I and II have not exercised their rights toliquidate either CDO. Since the company is not receiving any cashflow from its investments in any of the Kleros Real Estate CDOs,the events of default and liquidation notices do not have anyfurther impact on the company's cash flows.

However, the assets of the Kleros Real Estate I, II and III CDOsand the income they generate for tax purposes are a component ofthe company's REIT qualifying assets and income. If more than oneof the Kleros Real Estate CDOs is liquidated the company may haveto deploy additional capital into REIT qualifying assets in orderto continue to qualify as a REIT. If the company is not able toinvest in sufficient other REIT qualifying assets, its abilityto qualify as a REIT could be materially adversely affected.

Moody's does not rate the 8.875% senior unsecured notes, the senior unsecured bank facilities or approximately $150 million of first mortgage notes. The outlook is stable.

"Moody's upgraded AmeriGas' ratings to reflect the substantial progress the partnership has made in reducing leverage and improving its operational performance, despite the challenges of rising propane prices and customer conservation," Pete Speer, Moody's vice-president and senior analyst, commented. "The upgrade is also based on Moody's expectation that management continues its conservative financial policies, including how the partnership funds future acquisitions within the propane sector."

AmeriGas' Ba2 CFR reflects its leading market position, geographic diversification, low financial leverage and solid distribution coverage. The partnership is the largest retail marketer of propane in the United States and services approximately 1.3 million propane customers from locations in 46 states.

Through its AmeriGas Cylinder Exchange (ACE) program, it is the second largest retail distributor of propane cylinders for grills. The ratings are also supported by management's long-term track record and the stable ownership provided by UGI Corporation.

The Ba2 rating also considers the continued challenges of operating in the propane distribution business which remains highly fragmented and competitive. The substantial increase in propane prices in recent years has encouraged more conservation and higher price sensitivity by customers. This trend, combined with warmer than normal winters, has made organic growth very difficult.

Moody's believes that these challenges, combined with the inherent expectations of MLP unit holders for distribution growth, make industry consolidation particularly attractive and heightens the acquisition event risk for the propane sector over the medium term. While AmeriGas has participated in industry consolidation, its acquisitions in recent years have been relatively small transactions.

If the partnership were to complete a more significant acquisition, Moody's would expect AmeriGas to use a substantial amount of equity funding and that any increases in leverage would be temporary and managed down to levels consistent with a Ba2 rating.

AMR CORP: Incurs $1.4 Billion Net Loss in Second Quarter 2008-------------------------------------------------------------AMR Corporation, the parent company of American Airlines, Inc., reported a net loss of $1.4 billion for the second quarter of 2008, or $5.77 per share. The current quarter results compare to a net profit of $317 million for the second quarter of 2007, or $1.08 per diluted share.

The second quarter results include special charges as previously disclosed in AMR's Form 8-K filing with the Securities and Exchange Commission on July 2. These include a $1.1 billion non-cash accounting charge to write down the value of certain aircraft and related long-lived assets to their estimated fair value and a charge of approximately $55 million of a total $70 million expected for severance-related costs resulting from the company's system-wide capacity reductions in the fourth quarter of this year. The remainder of the severance-related charge is expected to be taken in the third quarter. Excluding these special charges, AMR reported a second quarter net loss of $284 million, or $1.13 per share.

Record jet fuel prices contributed significantly to the company's loss in the second quarter of 2008. AMR paid $3.19 per gallon for jet fuel in the second quarter compared to $2.09 a gallon in the second quarter of 2007, a 53% increase. As a result, the company paid $838 million more for fuel in the second quarter of 2008 than it would have paid at prevailing prices from the prior-year period.

"Our company continues to be severely challenged by the fuel crisis that has afflicted our entire industry, and we expect these difficulties to continue for the foreseeable future," said AMR Chairman and CEO Gerard Arpey. "Clearly, our second quarter results were disappointing, but I am also pleased with our efforts as a company to take difficult but necessary steps to manage through this uncertainty. While we believe the airline industry cannot continue in its current form at today's record fuel prices, we also believe our decisions and hard work by employees in recent years have better prepared us to face these challenges. We remain committed to taking action -- whether that relates to capacity reductions, revenue enhancements, fleet changes or other efforts to improve our financial foundation -- as we work to secure our long-term future."

AMR highlighted additional actions it has taken in response to the ongoing challenges of record fuel prices and a softer economy. The company has obtained $720 million in new financing through a number of transactions, including the sale of certain aircraft that will remain in the company's fleet through a lease agreement, and through newly issued mortgage debt that is secured by aircraft. Of the new financing, approximately $500 million was received in July and will be recorded in the company's cash balance in the third quarter of 2008.

In addition, AMR has decided to retire all 34 of its A300 aircraft by the end of 2009, compared to the previous retirement schedule that extended through 2012. In 2008, AMR will retire 30 MD-80s, 10 A300s and 26 Saab turbo-prop aircraft, and will retire or remove from service 37 regional jets. The remaining A300s will be retired in 2009, which is expected to result in capacity reductions next year. A s it begins to replace its MD-80 fleet, the company continues to expect to take delivery of 70 more-fuel-efficient 737-800 aircraft in 2009 and 2010.

Given the current industry environment, AMR has decided to place on hold its planned divestiture of American Eagle, its regional affiliate, until industry conditions are more stable and favorable. AMR continues to believe that a divestiture makes sense in the long term for AMR, American, American Eagle and their stakeholders but AMR also believes that a divestiture is not sensible amid current conditions.

Operational Performance

AMR reported second quarter consolidated revenues of approximately $6.2 billion, an increase of 5.1% year over year. American's mainline passenger revenue per available seat mile (unit revenue) increased by 7.0% in the second quarter compared to the year-ago quarter. Mainline capacity, or total available seat miles, in the second quarter decreased by 2.2% compared to the same period in 2007.

American's mainline load factor -– or the percentage of total seats filled -- was 82.5% during the second quarter, compared to 83.6% in the second quarter of 2007. American's second-quarter yield, which represents average fares paid, increased 8.5% compared to the second quarter of 2007, its 13th consecutive quarter of year-over-year yield increases.

American's mainline cost per available seat mile (unit cost), excluding special items, increased 19.3% in the second quarter compared to the same period in 2007, largely due to higher fuel expense. Excluding fuel and special items, mainline unit costs in the second quarter of 2008 increased by 5.1% year over year.

Balance Sheet Update

AMR ended the second quarter with $5.5 billion in cash and short-term investments, including a restricted balance of $434 million. The second quarter 2008 cash balance includes $220 million received through financings involving aircraft mortgage and sale-leaseback transactions. The $500 million in additional aircraft financing was received after the second quarter ended and will be applied to AMR's third quarter 2008 cash balance.

AMR continues to expect the previously announced sale of American Beacon Advisors, Inc., valued at $480 million in total consideration, to be completed in the third quarter of 2008. At the end of the second quarter of 2007 AMR had $6.4 billion in cash and short-term investments, including a restricted balance of $470 million.

AMR's total debt, which it defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, was $15.2 billion at the end of the second quarter of 2008, compared to $17.3 billion at the end of the second quarter of 2007.

AMR's net debt, which it defines as total debt less unrestricted cash and short-term investments, was $10.1 billion at the end of the second quarter of 2008, compared to $11.4 billion at the end of the second quarter of 2007.

As of July 15, AMR had contributed $78 million to its employees' defined benefit pension plans in 2008. AMR has contributed more than $2 billion to its employee defined benefit pension plans since the beginning of 2002.

Guidance

A. Mainline and Consolidated Capacity

Following its capacity reduction announcement in May, AMR expects its full-year mainline capacity to decrease by 3.4% in 2008 compared to 2007, with a 5.7% reduction in domestic capacity and a 0.7% increase in international capacity compared to 2007 levels. On a consolidated basis, AMR expects full-year capacity to decrease by 3.7% in 2008 compared to 2007.

AMR expects mainline capacity in the third quarter of 2008 to decrease by 2.7% year over year. It expects consolidated capacity to decrease by 3.0% in the third quarter of 2008 compared to the prior-year period.

AMR has said on May 21, 2008, that it expects system-wide capacity to decline by 7.0% to 8.0% in the fourth quarter of 2008 compared to fourth quarter 2007 levels, with fourth quarter mainline domestic capacity expected to decline by 11.0% to 12.0% and fourth quarter regional affiliate capacity expected to decline by 10.0% to 11.0% compared to the same period in 2007.

Beyond the expected 2009 capacity reductions resulting from the retirement of the A300s, given current fuel price and economic trends, the company expects to make additional capacity reductions in 2009.

B. Fuel Expense and Hedging

While the cost of jet fuel remains very volatile, AMR is planning for an average system price of $3.81 per gallon in the third quarter of 2008 and $3.42 a gallon for all of 2008. AMR has 35.0% of its anticipated third quarter 2008 fuel consumption capped at an average crude equivalent of $95 per barrel (jet fuel equivalent of $2.92 per gallon), with 34.0% of its anticipated full-year consumption capped at an average crude equivalent of $82 per barrel (jet fuel equivalent of $2.60 per gallon). Consolidated consumption for the third quarter is expected to be 772 million gallons of jet fuel.

C. Mainline and Consolidated Unit Costs

For the third quarter of 2008, mainline unit costs are expected to increase 26.1% compared to the third quarter of 2007, while third quarter consolidated unit costs are expected to increase 25.7% compared to the third quarter of 2007.

In the third quarter of 2008, mainline unit costs excluding fuel are expected to increase 3.6% year over year while consolidated unit costs excluding fuel are expected to increase 3.9% from the third quarter of 2007.

Full-year mainline unit costs are expected to increase 21.5% in 2008 compared to 2007, while full-year consolidated unit costs are expected to increase 21.2% in 2008 compared to 2007.

Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:AMR) operates with its principal subsidiary, American AirlinesInc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jetservice to about 150 destinations throughout North America, theCaribbean, Latin America, including Brazil, Europe and Asia. American is also a scheduled airfreight carrier, providingfreight and mail services to shippers throughout its system.

Its wholly owned subsidiary, AMR Eagle Holding Corp., owns tworegional airlines, American Eagle Airlines Inc. and ExecutiveAirlines Inc., and does business as "American Eagle." AmericanBeacon Advisors Inc., a wholly owned subsidiary of AMR, isresponsible for the investment and oversight of assets of AMR'sU.S. employee benefit plans, as well as AMR's short-terminvestments.

* * *

As reported in the Troubled Company Reporter-Latin America onMarch 26, 2008, Standard & Poor's Ratings Services revised itsoutlook on the long-term ratings on AMR Corp. (B/Negative/B-3)and subsidiary American Airlines Inc. (B/Negative/--) tonegative from positive. S&P also lowered its short-term ratingon AMR to 'B-3' from 'B-2' and affirmed all other ratings on AMRand American.

On July 15, 2008, the TCR said that Moody's Investors Service placed the debt ratings of AMR Corp. and its subsidiaries under review for possible downgrade. The company has an outstanding B2 corporate family rating. The review includes the ratings for certain equipment trust certificates and enhanced equipment Trust Certificates of American Airlines, Inc.

Likely Bankruptcy Filing This Year

As reported in the Troubled Company Reporter on June 5, 2008,AMR Corp., parent of American Airlines, is considered a possiblechapter 11 candidate and could tumble over into chapter 11bankruptcy this year, Stockhouse.com said, citing record prices inoil.

AMR has said report of possible bankruptcy filing is unfounded.

Stockhouse.com noted that although AMR is the world's largestairline, it is now a small cap stock, with a market value of only$1.8 billion. The report also notes that AMR has $9.3 billion indebt and may not have the money to cover its debt service as theyear passes.

The TCR said on May 26, 2008, Jamie Baker, an analyst at J.P.Morgan, said U.S. airline industry stands to post a collective$7,200,000,000 in operating losses in 2008. The results would bewider than an initial forecast of $4,600,000,000 loss, the analystsaid.

Mr. Baker, in his research note, said though investors, managementand analysts may talk about airlines acting collectively to reducecapacity to firm up revenue, the reality is that they are morelikely to dig in and try to outlast each other.

U.S. Airways has the highest risk of bankruptcy, followed byNorthwest Airlines, United Air Lines' parent UAL Corp., AMR Corp.,JetBlue, Continental Airlines, AirTran, Delta Air Lines, AlaskaAir Lines and Southwest Airlines.

The downgrade to 'BB-' reflects the effect of two strikes at Appalachian Regional Healthcare by two separate unions within the past 15 months. The second strike, a nurses strike that lasted from October 2007 through December 2007, resulted in more than $20 million in costs, and, as a result, ARH's operating margin for the 11 months ending May 31, 2008 was a negative 3.9% on losses of $18.5 million. Bottom line losses after including investment income totaled $14.9 million. The losses in fiscal 2008 will further weaken ARH's already light liquidity position. Management indicated that ARH will begin fiscal 2009 with approximately $38 million in cash which translates to a weak 31.2 days cash on hand, a 2.7 times cushion ratio and 37.3% cash to debt, all of which are all below Fitch's non-investment-grade median.

Furthermore, Fitch is concerned that given the 31.2 DCOH is significantly below the reported days in accounts receivable of 57.6 days for the 11-month interim period, the organization does not have enough liquidity relative to expenses to cover its revenue cycle.

ARH's negative volume trends continued through fiscal 2008 and reflect the challenges of ARH's service area. The majority of ARH's facilities are located in rural communities in Kentucky and West Virginia and have below-average socioeconomic and demographic wealth indicators, resulting in a very high governmental payor mix (Medicare and Medicaid made up a combined 63.2% of gross revenues in fiscal 2007). An additional negative credit factor is the challenge that ARH faces in meeting the capital needs of its system given its financial performance and limited liquidity. ARH capital spending, on average, has been roughly equal to its depreciation expense each year. Management acknowledged that capital spending will slow due to ongoing operating and liquidity pressures, which Fitch views negatively.

The Stable Outlook reflects positive monthly operating results in each of the five months since the strike ended. This has helped reduce the operating losses from $23 million when the strike ended in December 2007 to $18.5 million as of May 31, 2008. Supporting the positive operations are improvements to physician recruitment and efforts to improve ARH's revenue cycle. For fiscal 2009, ARH has budgeted for a 1.4% positive operating margin, with operating income of $7.5 million. A key rating driver for ARH will be meeting its budget numbers in fiscal 2009.

APPLICA PET: S&P Withdraws Ratings on Planned Salton-Spectrum Deal------------------------------------------------------------------Standard & Poor's Ratings Services withdrew its ratings on small appliance manufacturer Salton Inc. and its wholly owned subsidiary, Applica Pet Products LLC, including the 'B+' corporate credit ratings on both entities. These ratings were based upon Salton Inc.'s proposed acquisition of the global pet business from Spectrum Brands Inc. (CCC+/Watch Pos/--). Proceeds from the proposed bank loan facility to Applica Pet were to finance the acquisition by Salton. On July 14, 2006, both parties announced that it terminated the sale agreement, thus S&P are withdrawing all related ratings.

Fitch has withdrawn the ratings with ILA's completion of its merger with Great Plains Energy, Inc. (GXP, not rated by Fitch) and simultaneous sale of select utility properties to Black Hills Corp. ('BBB' IDR). GXP will assume all of ILA's outstanding debt.

Fitch placed ILA's ratings on Ratings Watch Positive in June 2007 on the news of the sale of assets to Black Hills Corp. and the merger with GXP.

ATA AIRLINES: Wants to Auction Remaining Aircraft-Related Assets----------------------------------------------------------------ATA Airlines, Inc. seeks permission from the U.S. Bankruptcy Court for the Southern District of Indiana to conduct separate auctions of its remaining aircraft-related equipment and miscellaneous assets.

Aircraft-related assets slated for auction include rotables, shelving, ground service equipment, among other things. Also up for auction are ATA Airlines' properties currently stored in its warehouse at 2413 North Support Road-DFW Airport, in Texas. The auctions will be conducted in Indianapolis, Dallas and Hawaii.

Assets that have been approved by the Court for sale or disposition, and are subject of pending sales are not included in the proposed auctions. Also not included are assets that have been identified in the Requests for Proposal issued by ATA Airlines on June 10, 2008, except those the airlines decides not to include in a private or stalking horse bid sale.

The RFPs

The RFP Assets consist of separate packages of aircraft parts and related equipment, grouped together by aircraft type. In the RFPs, the Debtor solicited bids for entire packages and indicated that it would not accept bids for individual pieces of equipment. If the Debtor receives no interest, or insufficient interest, for any or all of the RFP Property Packages, then the RFP Assets in the RFP Property Packages that are in the possession of the Debtor will be included in the proposed auction.

If the Debtor receives bids on any of the RFP Property Packages which, in its business judgment, will result in an ultimate sale that will generate a greater amount of net sales proceeds than would be received in an auction of the property, the Debtor reserves the right to sell the applicable RFP PropertyPackages in a private or stalking horse sale, subject to Bankruptcy Court approval.

Auctions

ATA Airlines intends to conduct an auction of its assets located in Indianapolis on September 10 and 11, 2008, 10:00 a.m., Eastern time, at 4555 West Bradbury, in Indianapolis, Indiana. Meanwhile, its properties in Dallas are slated for auction on September 4 and 5, 2008, 10:00 a.m., Central time, at 2413 NorthSupport Road-DFW Airport, in Dallas, Texas.

ATA says it will hold an auction in Hawaii simultaneous with the auction its proposed auctioneer, Starman Bros. Auctions Inc., will conduct for Aloha Airlines, Inc. The date and venue for the auction has not yet been set. However, when the information is determined, the Debtor will file a notice containing the information with the Bankruptcy Court and other notice parties.

ATA Airlines proposes to conduct the auctions pursuant to these terms:

(1) The sale is to be conducted without reserve and no item is subject to a reserve price. All buyers are required to pay the entire price, including tax after the sale is completed.

(2) Buyers have 72 hours from the time of the auction to remove the property that have been sold to them, and will be liable for all expenses of storage if they fail to do so within that period.

(3) Bidders are not allowed to operate any equipment unless allowed by ATA Airlines. If permission is granted, the bidder agrees that the operation is at his own risk, and will indemnify the airlines and Starman Bros., for loss, injury or damage that may occur as a result of the operation.

(4) No agent or representative of ATA Airlines and Starman Bros., is authorized to make warranty or representation as to the property subject for sale. The airlines and the auctioneer will not be liable for any incorrect description or defect on any item or lot.

(5) In case a buyer fails to comply with the terms of the sale, Starman Bros., has the right to resell the purchased items, and any deposits made will be forfeited. In the event the property is resold, the forfeiting buyer will be held liable for any deficiency or costs resulting from the resale as well as any other damages sustained by ATA Airlines.

About ATA Airlines

Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is adiversified passenger airline operating in two principal businesslines -- a low cost carrier providing scheduled passenger servicethat leverages a code share agreement with Southwest Airlines; anda charter operator that focused primarily on providing charterservice to the U.S. government and military. ATA is a whollyowned subsidiary of New ATA Acquisition, Inc. -- a wholly ownedsubsidiary of New ATA Investment, Inc., which in turn, is a whollyowned subsidiary of Global Aero Logistics Inc. ATA Acquisitionalso owns another holding company subsidiary, World Air Holdings,Inc., which it acquired through merger on August 14, 2007. WorldAir Holdings owns and operates two other airlines, North AmericanAirlines and World Airways.

Global Aero Logistics acquired certain of ATA's operations afterits first bankruptcy. The remaining ATA affiliates that were notsubstantively consolidated in the company's first bankruptcy casewere sold or otherwise liquidated.

ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D.Ind. Case No. 08-03675), citing the unexpected cancellation of akey contract for ATA's military charter business, which made itimpossible for ATA to obtain additional capital to sustain itsoperations or restructure the business. ATA discontinued alloperations subsequent to the bankruptcy filing. ATA's Chapter 22bankruptcy petition lists assets and liabilities each in the rangeof $100 million to $500 million.

The Debtor is represented in its Chapter 22 case by Haynes andBoone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel.

The United States Trustee for Region 10 appointed five members tothe Official Committee of Unsecured Creditors. Otterbourg,Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel tothe Committee. FTI Consulting, Inc., acts as the panel'sfinancial advisors. The Debtors have until July 31, 2008, toexclusively file their bankruptcy plan.

ATA AIRLINES: Allowed to Auction Chicago, Indianapolis Properties -----------------------------------------------------------------ATA Airlines, Inc. obtained approval from the U.S. Bankruptcy Court for the Southern District of Indiana to auction off its properties located in its facilities in Chicago and Indianapolis.

As reported in the Troubled Company Reporter on June 25, 2008, the properties slated for auction include vehicles, computer equipment, office furnishings and supplies, among other things. Aircraft-related assets are not included in the auctions.

ATA Airlines will conduct an auction of its properties in Chicago starting at 10:00 a.m., Central time, on July 24, 2008, at 6648 S. Narragansett Avenue, in Bedford Park, Illinois. Meanwhile, its properties in Indianapolis are slated for auction beginning at 10:00 a.m., Eastern Time, on July 22, 2008, at 7337 West Washington, Buildings 2 and 3, in Indianapolis, Indiana.

Pyramid Auction Services, Inc., as auctioneer, has been required to file a report of the sale within seven days after the auctions, and furnish counsel for the U.S. Trustee, the Official Committee of Unsecured Creditors and JPMorgan Chase Bank, N.A., a copy of the report. It has also been required to file with each report an affidavit listing the commission received and costs reimbursed.

No further hearing is required to approve the results of the auctions, or authorize the payment of commission and reimbursement of expenses to Pyramid Auction, unless an objection to the reports and affidavits is filed within five days after their issuance.

About ATA Airlines

Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is adiversified passenger airline operating in two principal businesslines -- a low cost carrier providing scheduled passenger servicethat leverages a code share agreement with Southwest Airlines; anda charter operator that focused primarily on providing charterservice to the U.S. government and military. ATA is a whollyowned subsidiary of New ATA Acquisition, Inc. -- a wholly ownedsubsidiary of New ATA Investment, Inc., which in turn, is a whollyowned subsidiary of Global Aero Logistics Inc. ATA Acquisitionalso owns another holding company subsidiary, World Air Holdings,Inc., which it acquired through merger on August 14, 2007. WorldAir Holdings owns and operates two other airlines, North AmericanAirlines and World Airways.

Global Aero Logistics acquired certain of ATA's operations afterits first bankruptcy. The remaining ATA affiliates that were notsubstantively consolidated in the company's first bankruptcy casewere sold or otherwise liquidated.

ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D.Ind. Case No. 08-03675), citing the unexpected cancellation of akey contract for ATA's military charter business, which made itimpossible for ATA to obtain additional capital to sustain itsoperations or restructure the business. ATA discontinued alloperations subsequent to the bankruptcy filing. ATA's Chapter 22bankruptcy petition lists assets and liabilities each in the rangeof $100 million to $500 million.

The Debtor is represented in its Chapter 22 case by Haynes andBoone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel.

The United States Trustee for Region 10 appointed five members tothe Official Committee of Unsecured Creditors. Otterbourg,Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel tothe Committee. FTI Consulting, Inc., acts as the panel'sfinancial advisors. The Debtors have until July 31, 2008, toexclusively file their bankruptcy plan.

ATA AIRLINES: Taps Starman Bros. to Sell Aircraft-Related Assets----------------------------------------------------------------ATA Airlines, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Indiana to employ Starman Bros. Auctions Inc. to market and auction its remaining aircraft-related equipment and other assets.

ATA Airlines selected Starman because of the firm's extensive experience on marketing and liquidating aviation-related assets. Starman previously handled the liquidation of those types of asset for other airlines, including Midway and Northwest Airlines.

If the proposed employment is approved, Starman Bros., would be assigned to coordinate an auction in Indianapolis, Dallas and Hawaii.

In exchange for its services, Starman Bros., will get a commission equal to 5% of the gross sale proceeds in excess of $5,000,000, and 4% of the first $5,000,000 in gross sale proceeds. The firm is also entitled to reimbursement of up to $30,000, for the cost it may incur in advertising the auctions and is permitted to charge buyers a 5% premium on the gross proceeds of any sale.

Steve Starman, president of Starman Bros., assures the Court that his firm does not hold or represent any interest adverse to ATA Airlines' estate.

About ATA Airlines

Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is adiversified passenger airline operating in two principal businesslines -- a low cost carrier providing scheduled passenger servicethat leverages a code share agreement with Southwest Airlines; anda charter operator that focused primarily on providing charterservice to the U.S. government and military. ATA is a whollyowned subsidiary of New ATA Acquisition, Inc. -- a wholly ownedsubsidiary of New ATA Investment, Inc., which in turn, is a whollyowned subsidiary of Global Aero Logistics Inc. ATA Acquisitionalso owns another holding company subsidiary, World Air Holdings,Inc., which it acquired through merger on August 14, 2007. WorldAir Holdings owns and operates two other airlines, North AmericanAirlines and World Airways.

Global Aero Logistics acquired certain of ATA's operations afterits first bankruptcy. The remaining ATA affiliates that were notsubstantively consolidated in the company's first bankruptcy casewere sold or otherwise liquidated.

ATA Airlines filed for Chapter 22 on April 2, 2008 (Bankr. S.D.Ind. Case No. 08-03675), citing the unexpected cancellation of akey contract for ATA's military charter business, which made itimpossible for ATA to obtain additional capital to sustain itsoperations or restructure the business. ATA discontinued alloperations subsequent to the bankruptcy filing. ATA's Chapter 22bankruptcy petition lists assets and liabilities each in the rangeof $100 million to $500 million.

The Debtor is represented in its Chapter 22 case by Haynes andBoone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel.

The United States Trustee for Region 10 appointed five members tothe Official Committee of Unsecured Creditors. Otterbourg,Steindler, Houston & Rosen, P.C., serves as bankruptcy counsel tothe Committee. FTI Consulting, Inc., acts as the panel'sfinancial advisors. The Debtors have until July 31, 2008, toexclusively file their bankruptcy plan.

ATLANTIC YARNS: New Brunswick Writes Down C$37.5 Mil. in Loans--------------------------------------------------------------The government of New Brunswick, Canada wrote off about C$37.5 million relating to the Companies Creditors Arrangement Act proceeding of Atlantic Yarns of Atholville and Atlantic Fine Yarns of Pokemouche, Tim Jaques of The Tribune reports.

New Brunswick Business Minister, Greg Byrne, said "it was case of lose some or lose it all," The Tribune states.

The government wrote down $21.6 million owed by Atlantic Yarns, and C$15.9 million owed by Atlantic Fine Yarns, The Tribune says. After the writedown, Atlantic Fine Yarns will still owe $23.6 million plus C$2.6 million guaranteed loans, and Atlantic Yarns will still owe C$15 million, The Tribune writes.

Atlantic Yarns and Atlantic Fine Yarns were closed since they filed for protection under CCAA last year, The Tribune notes. Both companies were offered a reopening in August 2008, the report adds.

The Debtors' bankruptcy plan was approved by the Court of Queen's Bench in late June 2008. GE Capital Canada Equipment Financing Inc., which was initially against the plan had eventually consented to the plan, The Tribune relates.

The Debtors will have C$18 million in working capital, The Tribune notes.

Mr. Bryne asserted that the Debtors "have been strong employers in the region" and helping them was the best option done by the government, The Tribune reports. The government understands that it is not the only creditor in the case but said that it will support the Debtors' plan of reinvesting in and reopening of their operations, The Tribune notes.

Mr. Byrne said that there is hope for the Debtor's future through Canada's pending trade agreements with South American countries, passage of Outward Processing Initiative that grants more favorable tariff rates for clothes made of Canadian yarn to enter the market, The Tribune relates.

As reported in the Troubled Company Reporter on Oct. 31, 2007, Atlantic Yarns Inc. and Atlantic Fine Yarns have filed forbankruptcy protection. The companies and a certain trustee had met with representatives of the Communications, Energy and Paperworkers Union of Canada to negotiate about future concerns. Union representative Pat Roy had revealed that at that meeting, workers were told of the companies' need to restructure and that within 30 days, the companies will determine whether to cut jobs or close down mills. Mr. Byrne had said that a pending trade agreement with Peru or Columbia could help the companies gain access to foreign markets.

Atlantic Yarns received loans and guarantees of about C$37.0 million, while Atlantic Fine Yarns got around C$41.5 million.

About Atlantic Yarns

New Brunswick, Ontario-based Atlantic Yarns Inc. manufacturescotton and poly cotton yarns. The company produces contaminationfree yarn using cotton from the United States. It produces openend and ring spun carded and combed yarns. The company generatesannual sales of $10 million to $50 million. Atlantic Yarns andAtlantic Fine Yarns are sister companies and have been receivingsubsidy from provincial taxpayers since they opened in 1998.

AUBURN MEMORIAL: NY Court Confirms Chapter 11 Bankruptcy Plan-------------------------------------------------------------The U.S. Bankruptcy Court for the Northern District of New York confirmed on July 10, 2008, Auburn Memorial Hospital's Amended Joint Plan of Reorganization, allowing the Debtors to emerge from Chapter 11 bankruptcy protection. The hospital filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code in April 2007.

Auburn Memorial's bankruptcy plan represents a fair settlement that ensures the long-term financial health of the institution. Under its provisions, distributions to creditors will begin immediately. Furthermore, all pensions for employees and retirees remain fully funded and guaranteed by the federal government.

Radian Asset Assurance Inc. objected to the Debtors' plan and sought for continuance of the July 10, 2008 confirmation hearing. Radian later withdrew the request.

The Debtor has until September 30, 2008, to use the cash collateral of their prepetition lenders.

"The [Auburn Memorial] board of trustees and management team are very grateful for the support shown by hospital employees and physicians as well as local foundations, elected officials, labor unions, and the public," said Scott Berlucchi, president and CEO of Auburn Memorial. "[Auburn Memorial] will continue to serve the community well into the future because we worked together to solve the financial issues confronting the hospital," he added.

Auburn Memorial continued to function throughout the financial restructuring process under a long-term operational strategy initiated before the Chapter 11 filing. The efforts tied to the strategy have proven successful with operations on track and on budget for 2008 and the number of in-patient admissions and out-patient services up significantly. No employee layoffs occurred as a result of the Chapter 11 process.

For more information about AMH and its emergence from Chapter 11 bankruptcy protection, contact:

Beverly Miller Director of community relations Tel: (315) 255-7239

As reported by the Troubled Company Reporter, Auburn Memorial Hospital filed for chapter 11 protection on April 24, 2007, with the U.S. Bankruptcy Court for the Northern District of New York. Two of the Debtor's affiliates, Auburn Memorial Companies, Inc., and A.M.H. Properties, Inc., also filed for bankruptcy.

According to the TCR, The Ithaca Journal said the action was done to address and resolve the liens recently filed against the Debtor real property by the Pension Benefit Guaranty Corporation. The Debtor also hopes to restructure its obligations owed to certain other creditors under chapter 11.

According to the Post-Standard, the Debtor had $20 million in unsecured debt, $13.8 million of which it owes to its employees' pension system, when it filed for bankruptcy.

Before filing for bankruptcy, the Debtor had initiated a long-termrestructuring plan that aims to guide its operations as well asprovide a framework for the Debtor to emerge as a financiallysound company, the Ithaca Journal related.

The Ithaca Journal further related that although the hospital had taken steps to address financial losses for the fiscal years 2004 to 2006, it accrued debt that weakened its finances and caused recent cash flow difficulties. The report said First Niagara Bank, Alliance Bank, and Cayuga Bank pledged debtor-in-possession financing for the Debtors to continue operations while under the bankruptcy process.

Headquartered in Auburn, New York, Auburn Memorial Hospital --http://www.auburnhospital.com/-- is a community-focused hospital that delivers a full range of acute, outpatient and preventivecare services for Cayuga County and the surrounding Finger Lakesregion of central New York.

As reported in the Troubled Company Reporter on July 14, 2008,Precision Drilling Trust said it will ask Grey Wolf's boardof directors to reconsider its $10.00 per share buyout offer ifGrey Wolf shareholders reject a proposed merger with Basic.

In light of this development, the board of directors of Grey Wolf plans to review the company's alternatives for enhancing shareholder value. This review will include an update to the company's existing strategic plan and will encompass consideration of continued internal growth by remaining independent, acquisitions, mergers, sale of the company, strategic alliances, joint ventures and financial alternatives.

The board has engaged UBS Investment Bank as its independent financial advisor to assist the Company in conducting this review.

"Grey Wolf remains fully committed to enhancing shareholder value. After thorough consideration, Grey Wolf's board believed that the addition of Basic's complementary business and assets would have been an excellent strategic fit for us and would have created significant value," Thomas P. Richards, chairman, president and CEO of Grey Wolf, said.

"The board will now continue to consider other alternatives to enhance shareholder value and it will do so in an environment of strong commodity prices, a related strengthening in the onshore U.S. lower 48 drilling market and the potential inherent in Grey Wolf's asset base," Mr. Richards continued.

The company cautions shareholders that there is no assurance that the review will result in any specific transaction and no timetable has been set for its completion. The company does not intend to disclose developments relating to this review unless and until its board approves a specific agreement or transaction.

The company will also take a pre-tax charge to earnings of approximately $17.00 million or approximately $.05 per diluted share during the third quarter of this year as a result of the shareholder vote and related termination of the merger agreement.

About Precision Drilling Trust

Precision Drilling Trust (NYSE:PDS and TSX:PD.UN) is anunincorporated open-ended investment trust established under thelaws of the Province of Alberta, Canada.

About Grey Wolf

Headquartered in Houston, Texas, Grey Wolf Inc. (AMEX: GW) --http://www.gwdrilling.com/-- provides turnkey and contract oil and gas land drilling services in the best natural gas producingregions in the United States with a current drilling rig fleet of121, which will increase to 123 with the expected addition of twonew rigs in 2008.

About Basic Energy Services

Headquartered in Midland, Texas, Basic Energy Services Inc.(NYSE:BAS) -- http://www.basicenergyservices.com/-- operates in the major oil and gas producing markets in the US including South Texas, the Texas Gulf Coast, the Ark-La-Tex region, North Texas, the Permian Basin of West Texas, the Mid Continent, Louisiana Inland Waters and the Rocky Mountains. Founded in 1992, Basic Energy has more than 4,600 employees in 11 states.

In the Dominican Republic, Basic Energy controls power companiesCepm, Cespm and Ege Haina.

BASIC ENERGY: Merger Kill Cues Moody's to Confirm Ba3 Ratings-------------------------------------------------------------Moody's Investors Service confirmed the ratings for Basic Energy Services, Inc. following the company's statement that it has terminated its proposed merger with Grey Wolf, Inc.

The confirmed ratings for Basic are the Ba3 corporate family rating, the Ba3 probability of default rating, the B1 (LGD 5, 74%) senior unsecured note rating, and the Ba1 (LGD 2,19%) rating on the senior secured revolving credit facility. This concludes the review for possible upgrade initiated on April 21, 2008 in response to the merger statement with GW. The outlook is stable.

Simultaneously, Moody's withdrew the ratings for Horsepower Holdings, Inc., the entity formed to be the holding company to facilitate the merger with GW. The ratings being withdrawn for HHI are the Ba2 CFR, the Ba2 PDR, the Ba1 (LGD 3, 39%) to the proposed first lien credit facilities, and the SGL-2 rating.

The confirmation of the Ba3 CFR follows the termination of the merger with GW that it resulted from the GW shareholders voting against the merger. Basic has disclosed that has terminated the merger agreement and will resume its strategy prior to the merger statement. The Ba3 continues to reflect Basic's position a leading provider of workover services in the North American market as well as its conservative financial policies.

(i) a Second Supplemental Indenture, dated effective as of June 30, 2008, with JPMorgan Chase & Co. and The Bank of New York, as trustee (to the Indenture, dated as of May 31, 1991, between Bear Stearns and The Bank of New York, as trustee, as amended);

(ii) a Supplemental Indenture, dated effective as of June 30, 2008, with JPMorgan Chase and The Bank of New York, as trustee (to the Indenture, dated as of Nov. 14, 2006, between Bear Stearns and The Bank of New York, as trustee);

(iii) a Third Supplemental Indenture, dated effective as of June 30, 2008, with JPMorgan Chase and The Bank of New York, as trustee (to the Indenture, dated as of Dec. 16, 1998, between Bear Stearns and The Bank of New York, as trustee, as amended);

(iv) a First Amendment, dated as of June 30, 2008, with, JPMorgan Chase and The Bank of New York, as trustee (to the Preferred Securities Guarantee Agreement, dated as of May 10, 2001).

In addition, on June 30, 2008, JPMorgan Chase entered into a Preferred Stock Guarantee, dated effective as of June 30, 2008.

Pursuant to the Supplemental Indentures, JPMorgan Chase fully and unconditionally guaranteed the timely and complete payment when due, whether by acceleration or otherwise, of all liabilities and obligations of Bear Stearns in its capacity as issuer of these securities:

(i) BearLink Alerian MLP Select Index ETN;

(ii) Principal Protected Sector Selector Notes Linked to a Basket of U.S. Sector Exchange Traded Funds Due February 2008;

(iii) Principal Protected Notes Linked to the S&P 500 Index Due October 2008;

(iv) Principal Protected Notes Linked to the Nasdaq-100 Index Due December 2009;

(v) Principal Protected Notes Linked to the S&P 500 Index Due November 2009;

(vi) Principal Protected Notes Linked to the Dow Jones Industrial Average Due March 2011;

(vii) Medium-Term Notes, Linked to a Basket of Three International Equity Indices Due August 2010; and

(viii) all other Bear Stearns' long-term debt issued under an effective registration statement under the Securities Act of 1933, as amended.

Pursuant to the Trust Preferred Guarantee, JPMorgan Chase fully and unconditionally guaranteed the timely and complete payment when due, whether by acceleration or otherwise, of all liabilities and obligations of Bear Stearns in its capacity as guarantor of the preferred securities of Bear Stearns Capital Trust III, a Delaware statutory business trust.

Pursuant to the Preferred Stock Guarantee, JPMorgan Chase fully and unconditionally guaranteed to each holder of the

(c) 5.49% Cumulative Preferred Stock, Series G, par value $1.00 per share the due and punctual payment of (i) any accumulated and unpaid dividends that have been properly declared by the board of directors of Bear Stearns on the Preferred Stock out of funds legally available therefor, (ii) the aggregate of the liquidation amount payable by Bear Stearns upon the Preferred Stock upon a voluntary or involuntary dissolution, winding-up or liquidation of Bear Stearns and (iii) the amount payable by Bear Stearns on redemption of the Preferred Stock upon shares of Preferred Stock duly called for redemption, as and to the extent applicable (without duplication of amounts theretofore paid by Bear Stearns) when and as the same shall become due and payable, according to the terms of the Preferred Stock as set forth in the applicable certificate of designations, which set forth the designation, rights and privileges of the applicable series of Preferred Stock with respect to which the guarantee is granted, regardless of any defense, right of setoff or counterclaim that Bear Stearns may have or assert.

As a result of the Guarantees, pursuant to Rule 3-10 of Regulation S-X and Rule 12h-5 under the Securities Exchange Act of 1934, as amended, Bear Stearns will cease to separately file current and periodic reports with the Securities and Exchange Commission under the Exchange Act. Those guaranteed securities that are listed on the New York Stock Exchange or the American Stock Exchange, as applicable, will continue to be so listed.

As reported in the Troubled Company Reporter on Dec. 28, 2007,Fitch Ratings' affirmed its Negative Outlook for The Bear StearnsCompanies Inc. following the announcement of the company's fiscalyear earnings for 2007.

On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term creditratings, along with its subsidiaries. Fitch also downgraded theshort-term rating to 'F1' from 'F1+', and Individual rating to'B/C' from 'B'.

BSSP SERIES: S&P Junks Rating on Class A-5 Certificates-------------------------------------------------------Standard & Poor's Ratings Services lowered its ratings on two classes of certificates from BSSP Series 2005-11. Additionally, S&P affirmed its ratings on three other classes from the same transaction. The five classes had an original total principal balance of approximately $49.54 million, and have a current balance of approximately $27.80 million.

The certificates from BSSP Series 2005-11 are collateralized by 25 classes from nine underlying transactions issued by Washington Mutual Mortgage Securities Corp. and Wells Fargo Home Mortgage in 2002 and 2003. The collateral for the underlying transactions consists primarily of U.S. residential prime jumbo first-lien mortgage loans with interest rates that start to adjust after a specified initial fixed-rate period. Subordination provides credit support for the classes in the underlying transactions. S&P reviewed the underlying transactions in April 2008.

S&P downgraded classes A-4 and A-5 from BSSP Series 2005-11 to reflect projected losses to the underlying classes due to delinquent loans in the underlying transactions' delinquency pipelines. To date, cumulative losses in BSSP Series 2005-11 total approximately $165,000, or 0.32% of the initial aggregate certificate balance.

Ratings Lowered

BSSP Series 2005-11

Rating ------ Class To From ----- -- ---- A-4 BB- BB A-5 CCC B

Ratings Affirmed

BSSP Series 2005-11

Class Rating ----- ------ A-1 AA A-2 A A-3 BBB

CALPINE CORP: Rosetta Wants Conference on Summary Judgment Plea---------------------------------------------------------------Rosetta Resources Inc., an independent oil-and-gas company, said that in accordance with local court rules, it filed a letter with the Bankruptcy Court in New York setting the legal deficiencies in Calpine Corporation's claims, and requesting a required conference with the Court prior to filing a motion for summary judgment in Rosetta's favor as to all claims by Calpine Corporation.

Although Rosetta continues to vigorously prepare its defense on the merits to Calpine's claims, Rosetta is seeking dismissal of the action given that the uncontradicted evidence respecting the transaction by which Rosetta acquired the oil and gas business conducted by Calpine Corporation's subsidiaries establishes that Calpine Corporation did not transfer any property to Rosetta and is legally prohibited from challenging transfers made to Rosetta by Calpine subsidiaries Calpine Fuels Corporation and Calpine Gas Holdings LLC.

In its letter to the Bankruptcy Court, Rosetta sets three main legal arguments as to why the Court should enter judgment in favor of Rosetta on each of Calpine's claims:

* Calpine's claims legally fail because the lawsuit was filed solely in the name and on behalf of Calpine Corporation, which, under the transaction structured by Calpine's outside professionals, never transferred or conveyed any of the oil and gas business to Rosetta Resources, Inc., the only defendant named in the suit. Rather, Calpine Fuels and Calpine Gas Holdings, both subsidiaries of Calpine Corporation and separate legal entities, conveyed to Rosetta their ownership interests in the even-further remote subsidiaries that held the assets and personnel comprising the oil and gas business;

* Calpine's claims are also legally barred because the oil and gas properties actually owned by Calpine Corporation were never transferred to Rosetta Resources Inc. Instead, Calpine Corporation contributed its properties to these even-further remote subsidiaries of Calpine Corporation's wholly-owned Calpine Gas Holdings. These subsidiaries, together with subsidiaries of Calpine Fuels, were subsequently transferred to Rosetta Resources Inc. Calpine's complaint ignores the specific seller entities involved in the transaction and other key critical facts and, as such, Calpine is completely incapable of demonstrating in its lawsuit that Rosetta Resources Inc. itself received any asset or property that Calpine owned or held; and

* Calpine's claims also should be denied in their entirety because certain safe-harbor provisions of the Bankruptcy Code exempt certain "settlement payments" made pursuant to a securities contract from fraudulent transfer claims, including the transfers challenged by Calpine Corporation in this litigation, given Rosetta Resources Inc.'s status as a "financial participant" as defined by the Bankruptcy Code.

In addition, Rosetta also informed the Court it would befiling a motion to disqualify PA Consulting, the professionalswho had advised Calpine during its bankruptcy and whose ToddFilsinger is currently serving as Calpine's Interim ChiefOperating Officer, for violation of the applicable ethical rules.In the lawsuit, PA Consulting, which maintains a nearly singularfocus on the power industry, was rendering opinions regarding thevaluation of the oil and gas Exploration & Production businessCalpine's subsidiaries conveyed. Due to the discretionary bonusthat Calpine promised PA Consulting for Mr. Filsinger's services,PA Consulting has a vested interest in ensuring a successfuloutcome in this lawsuit in violation of New York's ethical rules.

Randy Limbacher, President and CEO of Rosetta stated, "WhileRosetta has completed a number of depositions and has receivedthe opinions of Calpine's retained experts and has found nothingto change its view that the Calpine lawsuit is frivolous, thelegal defects in Calpine Corporation's claims described inRosetta's letter to the Court demonstrate dramatically how thetrue facts differ from those alleged by Calpine in its complaint, not just in how the transfer occurred, but in claiming thatCalpine did not receive fair value in the transaction. Nevertheless, until this lawsuit is dismissed, we will continueto fully protect Rosetta's and its shareholders' interests byvigorously defending against what Rosetta truly believes arefrivolous claims by Calpine arising out of a transaction thatCalpine's board and an extensive group of professionalsthoroughly vetted, reviewed, and approved."

About Rosetta

Rosetta Resources Inc.(Nasdaq:ROSE) --http://www.rosettaresources.com/-- is an independent oil and gas company engaged in acquisition, exploration, development and production of oil and gas properties in North America. Our operations are concentrated in the Sacramento Basin of California, South Texas, the Gulf of Mexico and the Rocky Mountains. Rosetta is a Delaware corporation based in Houston, Texas.

About Calpine Corporation

Based in San Jose, California, Calpine Corporation (OTC PinkSheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, naturalgas-fired and geothermal power plants. Calpine owns, leases andoperates integrated systems of plants in 21 U.S. states and inthree Canadian provinces. Its customized products and servicesinclude wholesale and retail electricity, gas turbine componentsand services, energy management and a wide range of power plantengineering, construction and maintenance and operationalservices.

On June 20, 2007, the Debtors filed their Chapter 11 Plan andDisclosure Statement. On Aug. 27, 2007, the Debtors filed theirAmended Plan and Disclosure Statement. Calpine filed a SecondAmended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed aThird Amended Plan. On Sept. 25, 2007, the Court approved theadequacy of the Debtors' Disclosure Statement and entered awritten order on September 26. On Dec. 19, 2007, the Courtconfirmed the Debtors' Plan. The Amended Plan was deemedeffective as of January 31, 2008.

Fitch's affirmations are based on the transaction maintaining an adequate reinvestment cushion, remaining within its other transaction covenants, and passing Fitch's property value decline stress scenarios. The deal was reviewed as approximately 17% of the portfolio has turned over since the last review.

The portfolio is selected and monitored by CBRE Realty Finance Management, LLC. CBRE 2006-1 has a five year reinvestment period during which, if all reinvestment criteria are satisfied, principal proceeds may be used to invest in substitute collateral. The reinvestment period ends April 2011.

Asset Manager:

CBRF is the external advisor to the collateral manager for CBRE 2006-1. CBRF is a direct subsidiary of CBRE|Melody & Co., which is in turn a subsidiary of CB Richard Ellis (NYSE: CBG). In addition to serving as a collateralized debt obligation manager, CBRF is also the external manager for CBRE Realty Finance, Inc., a publicly traded real estate investment trust (NYSE: CBF).

CBRF uses Midland Loan Services, Inc. (rated 'CPS1' as a primary servicer, 'CMS1' as a master servicer, and 'CSS1' as a special servicer by Fitch) and GEMSA Loan Services, LP (rated 'CPS1' as a primary servicer and 'CMS1-' as a master servicer by Fitch) for primary, master, and special servicing of its CDO collateral.

Performance Summary:

As of the June 19, 2008 trustee report, the as-is poolwide expected loss for CBRE 2006-1 has decreased slightly to 25.000% from 25.875% at the last review in September 2007. This decrease is primarily due to the payoff of two loans with an above-average expected loss. The pool's improvement was muted by the application of Fitch's interim surveillance methodology to the rated securities portion of the portfolio (16.2%) and the addition of one highly leveraged hotel loan (4.2%). The CDO continues to have below average reinvestment flexibility with 6.625% of cushion.

The tighter cushion is somewhat mitigated by the pool's approximately 67.5% concentration of long-term, fixed-rate loans and securities. These loans have a weighted average life of 4.3 years and are less likely to repay during the reinvestment period.

Since the last review in September 2007, three commercial real estate loans were repaid (14.0%); while five new CRELs (17.2%) were added to the pool. The loans added to the pool had a lower weighted average expected loss than the loans that were paid off.

The overcollateralization and interest coverage ratios of all classes have remained above their covenants, as of the June 19, 2008 trustee report.

Collateral Analysis:

The CDO is comprised of approximately 83.4% CRE loans, including 54.1% whole loans/A-notes, 17.8% mezzanine loans, and 11.5% B-notes. Fitch and the asset manager include any future funding obligation within its classification of the assets. Currently, $4.8 million of future funding obligations exist within the CDO.

Per the June 19, 2008 trustee report and based on Fitch categorizations, the CDO contains 35.6% of collateral backed by office properties. Hotel and non-traditional property types loans comprise 28.4% of the CDO. The CDO is also within all its geographic covenants.

The Fitch Loan Diversity Index is 326 compared to the covenant of 364, which represents average diversity as compared to other CRE CDOs.

S&P placed the 'B-' rating on Chaparral's senior unsecured debt on CreditWatch with developing implications. The rating is contingent on the final capital structure and asset value supporting the unsecured debt.

"The positive CreditWatch on Chaparral's corporate credit rating reflects the expected improvement to the company's liquidity and financial profile due to the merger with Edge, as well as the sale of $150 million series B convertible preferred stock and a new credit facility with up to a $1 billion borrowing base," said Standard & Poor's credit analyst Paul Harvey.

Pro forma debt to EBITDA would improve to around 3.5x, or about 4x if preferred equity is treated as debt, from 6x at Dec. 31, 2007. Further, Chaparral's production and cash flows should benefit from the more rapidly producing Edge properties, which will lower Chaparral's pro forma reserve life to around 18 years from 24. In addition, liquidity will benefit from debt repayment via the proceeds of the series B preferred stock as well as from the expanded borrowing base.

Standard & Poor's will resolve the CreditWatch listings when the merger closes. Positive rating actions would require Chaparral to successfully close the merger with Edge without significantly altering its projected debt leverage or expected liquidity.

-- $72.9 million class D to 'AAA' from 'AA+'; -- $19 million class E to 'AAA' from 'AA-'; -- $57.1 million class F to 'BBB+' from 'BBB-'; -- $12.7 million class G to 'BBB-' from 'BB+'; -- $22.2 million class H to 'B+' from 'B'.

The $13.3 million class J is not rated by Fitch. Class A-1 has paid in full.

The upgrades are due to additional paydown of 20 loans (32%) including the largest loan in the deal, 75 State St., since Fitch's last rating action. In total, 19 loans representing 29% of the deal are defeased. As of the June 2008 distribution date, the transaction's aggregate principal balance has paid down 49% to $646.2 million from $1.27 billion at issuance.

In addition, twenty-eight loans (62%) of the pool are scheduled to mature in 2008, and the weighted-average coupon for the non-defeased maturities is 6.72%. The largest maturing loan (19.9%) is secured by a retail property located in Towson, Maryland. The property continues to show improved performance since issuance. The servicer reported year-end 2007 DSCR is 1.94x and the property is 95% occupied.

The transaction is concentrated by loan size with the largest loan and top-five largest loans representing 20% and 38% of the pool, respectively. According to servicer provided operating statements, the performance of the largest loan and the top-five loans has improved since issuance.

There is currently one specially serviced loan (1%) in the deal. The loan is secured by an office property located in Bingham Farms, Michigan. The loan transferred to the special servicer in May 2008 due to imminent default as the borrower indicated the loan would not payoff at maturity July 1, 2008. The property's occupancy has declined as a result of tenant vacancies and a weak market. The borrower continues to market the vacant space at the property. As of March 2008, the property was 51% occupied.

Five loans (2.8%) are identified as Fitch loans of concern as a result of declines in occupancy and performance. Four (2.6%) of the five loans are scheduled to mature in 2008, and have interest rates ranging from 6.85% to 7.00%.

CHRYSLER AUTOMOTIVE: Moody's to Review Ratings for Likely Cut-------------------------------------------------------------Moody's Investors Service is reviewing the ratings of Chrysler Automotive LLC for possible downgrade. Ratings under review include Chrysler's B3 Corporate Family Rating, B1 senior secured first lien term loan rating, and Caa1 senior secured second lien term loan rating.

The review is focusing on the degree to which Chrysler's operational initiatives will successfully address both the U.S. auto market's shift away from trucks and SUV's towards cars and crossovers, as well as the weakness in overall demand.

"Although Chrysler is being pretty aggressive in adjusting its operating structure to accommodate current market conditions," Bruce Clark, senior vice president with Moody's said, "its biggest challenge will be in building enough profitability in its car and crossover portfolio to offset the rapidly eroding earnings profile of its truck and SUV portfolio."

A key consideration in Moody's review will be the degree to which Chrysler maintains adequate liquidity to cover all cash requirements until it can transition to an operating model that is more focused on cars and crossovers.

Chrysler Automotive LLC is headquartered in Auburn Hills, Michigan.

CINCINNATI BELL: Names Brian Ross COO; Gary Wojtaszek CFO---------------------------------------------------------Cincinnati Bell Inc. named Brian Ross as the company's chief operating officer and Gary Wojtaszek as its new chief financial officer. Mr. Ross previously held the position of chief financial officer for Cincinnati Bell. Both Mr. Ross and Mr. Wojtaszek will report to Jack Cassidy, president and chief executive officer.

As chief operating officer, Mr. Ross will oversee the daily management and performance of sales, marketing, and operating activities across all of Cincinnati Bell's business segments. Wojtaszek, as chief financial officer, will be responsible for Cincinnati Bell's corporate accounting, finance, treasury, and tax functions, as well as investor relations and corporate communications.

Since joining Cincinnati Bell in 1995 as assistant treasurer, Mr. Ross has held a variety of management positions including vice president of finance and accounting for Cincinnati Bell Wireless and senior vice president of finance and accounting for Cincinnati Bell Inc. He was named chief financial officer in 2004. Mr. Ross serves on the boards of the KnowledgeWorks Foundation, Ursuline Academy, and Diamond Fiber Composites Inc. In addition, he is on the boards of the Cincinnati Equity Fund and the New Markets Fund, which provide funding for the City of Cincinnati's urban renewal initiatives. Mr. Ross holds a bachelor's degree in economics, mathematics and statistics from Miami University and a master's degree in statistics from the University of California at Berkeley.

Mr. Wojtaszek most recently served as the senior vice president, treasurer, and chief accounting officer for the Laureate Education Corporation in Baltimore, Md., where he was responsible for global controller and treasurer functions. Previously, he was the vicepresident of finance and principal accounting officer for Agere Systems Inc., a leading manufacturer of integrated circuits used in telecommunications and networking equipment, hard-disk drives, and other devices. Mr. Wojtaszek holds a bachelor's degree in economics and history from Rutgers University and a master's degree in finance and accounting from Columbia University.

Cincinnati Bell conducts its operations through three businesssegments: Wireline, Wireless, and Technology Solutions.

* * *

At March 31, 2008, the company's consolidated balance sheet showed$2.0 billion in total assets and $2.7 billion in totalliabilities, resulting in a $660.3 million total stockholders'deficit.

CIT GROUP: Completes $2BB Sale of Home Lending Assets to Lone Star------------------------------------------------------------------CIT Group Inc. completed the sale of its Home Lending assets and received substantially all of the $1.8 billion of the cash proceeds from the disposal. The servicing operation and final cash payment remain on schedule to close in the first quarter of 2009.

As reported in the Troubled Company Reporter on July 3, 2008, CIT Group agreed to sell:

-- its Home Lending business, consisting of $9.3 billion in assets and related servicing operations, to Lone Star Funds for $1.5 billion in cash and the assumption of $4.4 billion of outstanding debt and other related liabilities,

-- as well its approximately $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance Inc. for approximately $300 million.

The servicing centers, which employ approximately 300 people, are located in Marlton, New Jersey and Oklahoma City, Oklahoma.

CIT Group also disclosed that its board of directors declared a regular quarterly cash dividend of $0.10 per share on its outstanding common stock. The common stock dividend is payable on Aug. 29, 2008, to shareholders of record on Aug. 15, 2008.

CIT's board also declared quarterly cash dividends of $0.396875 per share on the company's Series A preferred stock, $1.297250 per share on the company's Series B preferred stock and $1.093750 per share on the company's Series C preferred stock.

The preferred stock dividends are payable on Sept. 15, 2008, to holders of record on Aug. 29, 2008.

About Lone Star Funds

Headquartered in Dallas, Texas, Lone Star Funds --http://www.lonestarfunds.com/-- uses its reserves of Texas gold to round up distressed companies around the world. The company'sinvestments fall into five categories: asset acquisition,corporate acquisition, company sponsorship, refinancing andrecapitalization, and development.

About CIT Group

Headquartered in New York City, CIT Group Inc. (NYSE: CIT) --http://www.cit.com/-- is a commercial finance company that provides financial products and advisory services to more than onemillion customers in over 50 countries across 30 industries. Aleader in middle market financing, CIT has more than $80 billionin managed assets and provides financial solutions for more thanhalf of the Fortune 1000. A member of the S&P 500 and Fortune500, it maintains leading positions in asset-based, cash flow andSmall Business Administration lending, equipment leasing, vendorfinancing and factoring.

The CIT brand platform, Capital Redefined, articulates its valueproposition of providing its customers with the relationship,intellectual and financial capital to yield infinitepossibilities.

As reported in the Troubled Company Reporter on March 25, 2008,CIT Group drew upon its $7.3 billion in unsecured U.S. bankcredit facilities to repay debt maturing in 2008, includingcommercial paper, and to provide financing to its core commercialfranchises.

The company failed to draw from its normal operational fundingafter ratings firms downgraded the bank's debt.

* * *

As reported in the Troubled Company Reporter on June 2, 2008,Moody's Investors Service downgraded the senior unsecured ratingof CIT Group, Inc. to Baa1 from A3 and affirmed its Prime-2 short-term rating. CIT's long-term ratings remain on review forpossible downgrade.

DAIMLERCHRYSLER FIN'L: Moody's to Review Ratings for Likely Cut---------------------------------------------------------------Moody's Investors Service placed the ratings of DaimlerChrysler Financial Services Americas LLC, which has a B1 corporate family rating, under review for possible downgrade. This action follows Moody's statement that it is reviewing the ratings of Chrysler Automotive LLC, which has a B3 corporate family rating, for possible downgrade.

The review of Chrysler Financial's ratings primarily reflects the operating challenges of its affiliate, Chrysler Automotive. Because Chrysler Financial has extensive business connections and common ownership with Chrysler Automotive, Moody's links the ratings of the two firms.

The two-notch differential between the ratings reflects Moody's view that the creditors of Chrysler Financial have a lower expected loss than do the creditors of Chrysler Automotive in the event of default.

DAWAHARES LEXINGTON: Committee Wants Case Converted to Chapter 7----------------------------------------------------------------The Official Committee of Unsecured Creditors of Dawahare's of Lexington LLC asked the U.S. Bankruptcy Court for the Eastern District of Kentucky to convert the Debtor's chapter 11 case to a chapter 7 liquidation proceeding, Jamie Mason of The Deal relates.

The Committee told Judge Joseph M. Scott, Jr., that the conversion would benefit the interests of the estate, The Deal says. The Committee also wanted the Court to prevent the Debtor from further use of cash collateral to prevent deterioration in the value of the estate, The Deal notes.

The Troubled Company Reporter said on June 24, 2008, that Judge Scott gave interim approval to access its lender's cash collateral.

The TCR reported on July 4, 2008, that the Debtor will shutter and pursue a liquidation of its 22 remaining Dawahare's and Cat Bird Seat stores. The liquidation began July 14 and is expected to end September 30. About 400 employees are affected. The Deal relates that Hilco LLC is the Debtor's stalking horse bidder for the 22 stores.

The Committee continued that a chapter 11 liquidation of all of the Debtor's assets will result in an administratively insolvent estate, by $1 million, The Deal states. An insolvent estate is not able to pay unsecured claims of at least $7 million, the Committee asserted, The Deal states.

The Debtors have proposed a $35,000 break-up fee, plus 1% of inventory value, according to the Deal.

About Dawahare's of Lexington

Lexington, Kentucky-based Dawahare's of Lexington LLC, dbaDawahares and Catbird Seat -- http://www.dawahares.com/-- operates a chain of clothing stores in Kentucky, Tennessee, andWest Virginia. The company filed for Chapter 11 bankruptcyprotection on May 30, 2008 (Bankr. E.D. Ky. Case No. 08-51381). Judge Joseph M. Scott, Jr., presides over the case. Thomas Bunch,II, Esq., and W. Thomas Bunch, Sr., Esq., at Bunch & Brock,represent the Debtor in its restructuring efforts. Jay Indyke, Esq., at Cooley Godward Kronish LLP is counsel to The Official Committee of Unsecured Creditors. When the Debtor filed for bankruptcy, it listed total assets of $10,023,124 and total debts of $9,280,821.

DELTA AIR: Incurs $1 Billion Net Loss in Second Quarter 2008------------------------------------------------------------Delta Air Lines Inc.'s net loss for the June 2008 quarter was $1.0 billion, or $2.64 per diluted share, including special charges of $1.2 billion. Excluding special charges, net income for the quarter ended June 30, 2008, $137 million, or $0.35 per diluted share. There was more than $1 billion year-over-year increase in fuel input costs related to higher prices.

Delta's merger with Northwest Airlines is targeted to close during the fourth quarter of 2008. The company expects about $2 billion in annual merger-related synergies by 2012 with cash integration costs of about $600 million over three years.

As of June 30, 2008, Delta had $4.3 billion in unrestricted liquidity, including $1 billion available under its revolving credit facility.

"When faced with the challenge of unprecedented fuel prices, Delta distinguished itself by reacting quickly and decisively with strong topline growth, domestic capacity rationalization, cost initiatives, fuel hedging, and a focus on preserving liquidity –- while continuing to run a great airline and deliver exceptional customer service" said Richard Anderson, Delta's chief executive officer. "With our talented employees, revenue momentum, a solid balance sheet, and our game-changing merger with Northwest, we are well positioned to seize opportunities in the current environment and strengthen our leadership position as the global airline of choice."

Second Quarter Financial Results

In March, Delta announced it had recalibrated its 2008 business plan with a focus on preserving liquidity in light of the significant increase in crude oil prices. During the June quarter, as fuel prices continued to rise, the airline reevaluated its flight schedule, targeting additional reductions in capacity. Delta now expects system capacity for the second half of 2008 to be down 4% compared to 2007, with domestic capacity down 13% and international capacity up 14%. The company is now targeting to remove the equivalent of 100 regional aircraft from the system by the end of the year. Through aggressive revenue and cost initiatives, including expansion of its international network and utilization of its fuel hedge strategy, the company expects to cover about $3 billion of the estimated $4 billion raw impact of higher fuel input costs in 2008.

Delta said it expects to end the year with a liquidity position of $3.2 billion, including $1 billion available under its revolving credit facility.

"The fact that we mitigated nearly 80% of the impact of higher fuel input cost this quarter while improving our liquidity is a testament to both the strength of our action plan and the can-do spirit of the Delta people," said Edward Bastian, Delta's president and chief financial officer. "Unprecedented fuel prices have created a real crisis in the airline industry, and Delta has been a leader in responding with quick, decisive action."

Merger with Northwest

In April, Delta announced an agreement to merge with Northwest Airlines –- creating a formidable, long-term competitor with the revenue-generating power of a diverse global network combined with a best-in-class cost structure and solid balance sheet. The companies are targeting to close the merger by the end of 2008.Initial synergy estimates for the merger were based on a high-level approach. Since that time, the companies have formed teams to plan the integration of the two airlines and to review the full benefits of the merger taking a very detailed, bottom-up approach. Delta forecasts $500 million in synergies in 2009, increasing up to the full run-rate of about $2.0 billion in annual synergies by 2012. In addition, estimated cash integration costs have been refined and are expected to be about $600 million over three years.

The companies have achieved several significant milestones on the path toward closing the merger and completing a seamless integration of the airlines, including:

-- reaching an unprecedented pre-merger joint collective bargaining agreement between the Delta and Northwest units of the Air Line Pilots Association. This four-year agreement through 2012, which includes a process to establish an integrated pilot seniority list upon the closing of the merger, will give Delta the full ability to realize network and fleeting synergies. Pilots at both companies will receive pay raises and an equity stake in the combined company. The tentative agreement is subject to ratification by both airlines' pilot groups, which is expected by mid-August.

-- announcing a post-merger organizational structure and the executives who will hold key leadership positions in the combined airline.

-- forming 25 joint Delta-Northwest teams to plan integration activities and drive synergy achievement. These teams, which cover areas from operations to corporate support, are prioritizing integration activities with a focus on optimizing synergies and planning for a seamless operational and customer transition to the new Delta.

-- scheduling special meetings of Delta and Northwest stockholders to obtain the necessary stockholder approvals to close the merger. The meetings will be held on Sept. 25, 2008 in Atlanta (Delta) and New York (Northwest).

Revenue Momentum

June 2008 quarter revenue improved 10%, or almost $500 million, year over year. Based on the most recently available ATA data, Delta achieved a revenue premium to the industry –- its consolidated length of haul adjusted passenger unit revenue (PRASM) was 102% of industry average PRASM (excluding Delta) for the first five months of the year. Delta said it reached its goal of closing the PRASM gap to the industry a year ahead of schedule.

Revenue from Cargo operations increased 36% year over year due to significantly improved yields and higher volume, particularly in international markets. Other, net revenue grew $177 million, or 45%, reflecting an increase in passenger fees, growth in third-party Maintenance Repair and Overhaul (MRO) business, and additional revenue from the SkyMiles program.

Cost Discipline

Delta's operating expenses increased $2.1 billion, or 46%, compared to the June 2007 quarter, which reflects special charges of $1.3 billion and a more than $1 billion increase in costs due to higher fuel prices, partially offset by fuel hedging gains. Excluding the special charges described below, Delta's operating expenses increased 17%, or $782 million. Non-operating expenses, excluding special items, declined 40%, or $50 million, in the June 2008 quarter due to FAS 133 mark-to-market on hedges and lower effective interest rates.

Delta's mainline unit cost (CASM5) increased 51% to 15.67 cents for the June 2008 quarter compared to the prior year period, reflecting special charges and the significant increase in fuel costs. Excluding fuel expense and special items, mainline CASM increased 1% to 7.03 cents compared to the June 2007 quarter.

Special and Reorganization Items

Delta recorded special charges totaling $1.2 billion in the June 2008 quarter, including a $1.1 billion non-cash charge, net of a $119 million tax benefit, related to the impairment of goodwill and other intangibles. This charge represented the finalization of the $6.1 billion impairment charge taken in the March 2008 quarter and reflects the completion of impairment testing, including third party valuation procedures. Additional special charges included a $96 million severance charge for the previously announced voluntary workforce reduction programs and a $6 million charge related to facilities restructuring.

In the second quarter of 2007, Delta recorded income of $1.3 billion from reorganization and related items, primarily due to the discharge of claims and liabilities in connection with its bankruptcy proceedings and the adoption of fresh start reporting.

Liquidity Position

At the end of the June 2008 quarter, Delta had $3.3 billion in unrestricted cash, cash equivalents and short-term investments, including $671 million of cash collateral deposits received from counterparties to fuel hedging contracts. Delta has an additional $1 billion available under its revolving credit facility, resulting in a total unrestricted liquidity of $4.3 billion. At June 30, the company is in full compliance with all financial covenants.

Delta had $261 million in capital expenditures during the June 2008 quarter, with $222 million for investments in aircraft, parts and modifications.

Fuel Hedging

During the June 2008 quarter, Delta hedged 49% of its fuel consumption resulting in an average fuel price of $3.13 per gallon. Delta realized $313 million in gains on fuel hedge contracts settled during the quarter.

June 2008 Quarter Highlights

During the June 2008 quarter, Delta continued the positive momentum in its business, demonstrating its ongoing commitment to maintain strong employee relations and deliver an industry-leading customer experience.

-- The National Mediation Board announced that a decisive majority –- more than 60% -– of eligible Delta flight attendants rejected representation by the Association of Flight Attendants/Communication Workers of America, enabling Delta to continue a direct relationship with its flight attendants;

-- The U.S. Department of Transportation issued a final order granting antitrust immunity for six-way alliance activities in trans-Atlantic markets for SkyTeam members Air France, Alitalia, CSA Czech Airlines, Delta, KLM Royal Dutch Airlines and Northwest Airlines, enabling the carriers to offer customers more choice in flight schedules, travel times, services and fares;

-- Delta demonstrated continued commitment to superior operational performance by ranking in the top two of its competitive set for on-time performance for the last 12 months and by reducing the number of mishandled bags by 32% year-over-year in the June quarter.

-- Achievement of operational performance goals resulted in $10 million in Shared Rewards payments to Delta employees during the quarter;

-- Readers of Executive Travel magazine rated Delta the best airline in 2008 for domestic first class service, Crown Room Clubs and the SkyMiles program, demonstrating Delta's progress toward being the global airline of choice. They also preferred Delta to any other U.S. airline when traveling to Africa, the Middle East and Canada;

-- Delta strengthened its international expansion strategy by exercising options for two B777-200LR for delivery in early 2010;

-- Delta received the prestigious 2008 Green Cross for Safety Medal from The National Safety Council, which recognizes organizations and their leaders for outstanding achievements in safety and health, community service and responsible citizenship;

-- Delta enhanced customer check-in options by partnering with the Transportation Security Administration to launch paperless mobile check-in for domestic travel on Delta and Delta Connection flights departing from Delta's main terminal at LaGuardia Airport; and

-- Delta was the first U.S. airline to launch a comprehensive in-flight recycling program. Delta's program has successfully diverted 322 tons of waste since June 2007 and funded an EarthCraft home for Habitat for Humanity, one of Delta's Force for Global Good partners.

Ancillary Businesses

Delta's ancillary businesses include TechOps, the largest airline MRO organization in North America, serving more than 100 aviation and airline customers around the world, and DAL Global Services, which provides general aviation services, training and technical services, and staffing to airlines including Delta. The MRO business increased operating revenue more than 60% year over year in the June quarter and continued to post double-digit margins.

About Delta Air

Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) --http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrieracross the Atlantic, offering daily flights to 328 destinationsin 56 countries on Delta, Song, Delta Shuttle, the DeltaConnection carriers and its worldwide partners. Delta flies toArgentina, Australia and the United Kingdom, among others.

The Debtors filed a chapter 11 plan of reorganization anddisclosure statement explaining that plan on Dec. 19, 2007. OnJan. 19, 2007, they filed revisions to the plan and disclosurestatement, and submitted further revisions to the plan onFeb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors'disclosure statement. In April 25, 2007, the Court confirmed theDebtors' plan. That plan became effective on April 30, 2007. TheCourt entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News; Bankruptcy Creditors' Service,Inc., http://bankrupt.com/newsstand/or 215/945-7000).

DIABLO GRANDE: Housing Source to Buy Assets for $25 Million-----------------------------------------------------------The U.S. Bankruptcy Court for the Eastern District of California gave authority to the owner of Diablo Grande LP to auction the Debtor's assets in mid-August 2008, The Deal's Ben Fidler states. No official order approving the Debtor's proposed bidding procedures has been issued, The Deal adds.

At a July 10, 2008 hearing, the Court also authorized the Debtor to use Royal Bank of Scotland Group Plc's $1 million debtor-in-possession financing, The Deal notes.

According to The Deal, Housing Source Partners Inc., a real estate developer in Pismo Beach, Calif., was designated as stalking horse bidder. Housing Source, The Deal says, offered $25 million plus assumption of debts for the Debtor's real estate property, including an "unentitled agricultural land" also referred as "conservation land" and is subject to a settlement with certain environmental groups, The Deal notes.

Diablo, The Deal relates, believes that the conservation land has a significant value. Hence, the Debtor drafted an asset purchase agreement that will allow Diablo to exclude the conservation land from the sale and sell it to another buyer, The Deal reports.

Under the sale agreement, Housing Source will pay $24 million for the Debtor's main real property and the Debtor may or may not sell the land to Housing Source for $1 million, The Deal notes.

If RBS won't consent to the sale, Housing Source is entitled to a $200,000 withdrawal fee. Housing Source will get a break-up fee of 2% of the purchase price if it loses to another bidder, The Deal writes, citing court documents.

Three bids types will be accepted during the sale: single bids for either the real estate or the conservation land, or combined bids for both properties, The Deal notes. Minimum overbids for the real estate starts at $24.78 million, $1.07 for the conservation land, and $25.6 million for both the real estate and conservation land, according to The Deal.

Eric Starr, Esq., at Starr Finley LLP is counsel to Housing Source.

About Diable Grande

Patterson, California-based Diablo Grande LP owns 33,000-acre realproperty and runs a resort hotel with golf courses and conventioncenter. Diablo Grande LP's general partner is Diablo Grande Inc.with Donald Panoz as president. It filed for chapter 11protection on March 10, 2008 (Bankr. E.D. Calif. Case No. 08-90365). Judge Robert S. Bardwil is presiding the case. Ori Katz, Esq., and Michael H. Ahrens, Esq., at Sheppard Mullin Richter & Hampton LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets of between $50 million and $100 million and debts of between $50 million and $100 million.

DIABLO GRANDE: Gets Approval to Tap $1 Million DIP Fund from RBS----------------------------------------------------------------The U.S. Bankruptcy Court for the Eastern District of California gave Diablo Grande LP permission to draw from Royal Bank of Scotland Group Plc's $1 million debtor-in-possession financing, Ben Fidler of The Deal writes.

The Court also approved the Debtor's proposed bidding procedures under which Housing Source Partners Inc. is designated as stalking horse bidder, The Deal notes. Housing Source offered to buy the Debtor's main real property and a "conservation land" for $25 million, The Deal adds.

The Debtor may draw from the RBS's DIP facility on July 31, 2008, or at any later date if the stalking horse bid is withdrawn or the lender doesn't accept winning bid at the auction, The Deal says.

Patterson, California-based Diablo Grande LP owns 33,000-acre realproperty and runs a resort hotel with golf courses and conventioncenter. Diablo Grande LP's general partner is Diablo Grande Inc.with Donald Panoz as president. It filed for chapter 11protection on March 10, 2008 (Bankr. E.D. Calif. Case No. 08-90365). Judge Robert S. Bardwil is presiding the case. Ori Katz, Esq., and Michael H. Ahrens, Esq., at Sheppard Mullin Richter & Hampton LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed asset between $50 million and $100 million and debts between $50 million and $100 million.

EAU TECHNOLOGIES: WS Advances $600,000 to Purchase Common Stock---------------------------------------------------------------Water Science LLC advanced $600,000 to EAU Technologies, Inc., in anticipation of an exercise of a portion of its warrants to purchase company common stock. On June 27, 2008, WS exercised a portion of its warrants and the company agreed to issue 461,538 shares of common stock to WS, at an exercise price of $1.30 per share. The warrants were issued as part of the $4.2 million financing transaction disclosed in May 2007.

The May 15, 2007 press release stated that in a transaction that saw no further dilution in the fully diluted number of common shares of the company, the parties agreed to modify 8.4 million warrants held by Peter Ullrich and WS, which were received in earlier financings. In addition, WS committed to exercise with a "put" on up to 3,230,769 of the shares subject to the warrants, or up to $4.2 million. After lowering the price of the warrants to take into consideration the recent 90-day market average and an average price that met the needs of Mr. Ullrich, EAU was able to secure critical financing to assist the Company in moving towards self sufficiency. Mr. Ullrich is the owner of WS, Latin America's exclusive licensee of EAU's Empowered Water(TM) technologies. Mr. Ullrich has provided approximately $10.0 million to EAU through prior debt and equity financings, and this transaction brings his total support to $14.2 million. Mr. Ullrich is EAU's largest shareholder, and he joined EAU's Board of Directors on April 16, 2007.

About EAU Technologies

Based in Kennesaw, Ga. EAU Technologies Inc., fka as ElectricAquagenics Unlimited Inc. (OTC BB: EAUI) -- http://www.eau-x.com/-- is a supplier of Electrolyzed Water Technology and othercomplementary technologies with applications in diverseindustries.

EAU Technologies Inc.'s consolidated balance sheet at March 31,2008, showed $4,739,062 in total assets and $12,160,382 in totalliabilities, resulting in a $7,421,320 total stockholders'deficit.

Going Concern Doubt

As reported in the Troubled Company Reporter on April 8, 2008,HJ & Associates, LLC, in Salt Lake City, expressed substantialdoubt about EAU Technologies Inc., fka Electric AquagenicsUnlimited Inc.'s ability to continue as a going concern afterauditing the company's financial statements for the years endedDec. 31, 2007, and 2006. The auditing firm pointed to thecompany's working capital and stockholders' deficits.

Emporia III is a collateralized loan obligation that closed March 15, 2007 and is managed by Emporia Capital Management, LLC. Emporia III has a revolving portfolio of middle market loans. The revolving period is scheduled to end in April 2013.

The notes are affirmed as the portfolio has performed within Fitch's expectations since the closing date. Approximately 18.9% of the collateral is publicly rated by at least one agency, with 1.9% of the assets currently on rating watch negative by at least one agency, and an additional 5.8% on outlook negative. When factoring in Fitch's shadow ratings performed on the remainder of the portfolio, the average collateral credit quality is 'B-' which remains within the transaction covenant of 'B-/CCC+' factored in Fitch's analysis at transaction close. As of the latest trustee report dated June 2, 2008 there were no defaulted assets in the portfolio. Additionally, all overcollateralization and interest coverage tests were passing their minimum required levels as of the latest trustee report, and all coverage tests have increased since the transaction closed.

Approximately 87.5% of the loans in Emporia III's portfolio are senior secured loans, with the other 12.5% being second lien loans. The top three industry concentrations in Emporia III's portfolio are business services (11.3%), food, beverage, and tobacco (11.1%), and healthcare (10.3%). The largest 5 obligors in the portfolio represent roughly 6.5% of the collateral balance. The single largest obligor represents 1.4% of the collateral pool.

The ratings of the class A-1 notes, class A-2 notes, class A-3 notes, and class B notes address the likelihood that investors will receive full and timely payments of interest, as per the transaction's governing documents, as well as the stated balance of principal by the stated maturity date. The ratings of the class C, class D, and class E notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the transaction's governing documents, as well as the stated balance of principal by the stated maturity date.

ENRON CORP: Court Approves $13 Million Abbey Claim Compromise-------------------------------------------------------------At the behest of Enron Creditors Recovery Corp., the U.S. Bankruptcy Court for the Southern District of New York approved a compromise for Claim No. 25413 filed by Abbey National Treasury Services.

Claim No. 25413 arose from the 6.31% senior secured notesaggregating $475,000,000 in principal amount and the 6.19% seniorsecured notes aggregating EUR515,000,000 in principal amountissued by Marlin Water Trust, and Marlin Water Capital Corp.

Abbey purchased $50,000,000 of the U.S. Dollar Notes andEUR55,000,000 of the Euro Notes. During the Petition Date, Abbeysold its U.S. Dollar Notes for $8,875,000 and EUR25,000,000 ofits Euro Notes for EUR4,250,000, and the remaining EUR30,000,000for EUR5,137,500.

Abbey filed Claim No. 13585 in October 2002 against the Debtorsalleging a claim in the amount of the Abbey-Marlin Notes plusinterest, less the amounts Abbey received for the sale of theNotes. Enron objected to the Claim on the grounds that the Claimhas no merit.

After filing the Claim, Enron and Abbey determined that Claim No.13585 did not conform with the Bankruptcy Code or the Bar DateOrder with respect to the Euro Notes, which were not denominatedin lawful currency of the United States as of the Petition Date. Additionally, they agreed that Claim No. 13585 included incorrectcalculation dates.

In January 2007, the Court granted Abbey leave to amend Claim No.13585 to convert the amount asserted on the Euro Marlin Notesinto U.S. Dollars, reduce the amount of prepetition interestasserted by Abbey, and file an amended claim. Abbey then filedClaim No. 25413 seeking recovery of $84,349,437, which includes$2,311,643 of prepetition interest, plus postpetition interest.

In a desire to resolve Claim No. 25413 and any causes of actionthat may arise regarding the Abbey-Marlin Notes, the partiesengaged in extended arm's-length negotiations between Enron andAbbey over several months. As a result, the parties entered intoa settlement agreement, under which:

(a) Claim No. 25413 will be allowed as a Class 4 General Unsecured Claim for $13,000,000 against Enron; and

(b) the parties will mutually release one another from all claims or causes of action related to the Abbey-Marlin Notes.

The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth AmendedPlan and on the same day the Court approved the adequacy of theDisclosure Statement. On July 15, 2004, the Court confirmed theDebtors' Modified Fifth Amended Plan and that plan was declaredeffective on Nov. 17, 2004. (Enron Bankruptcy News, Issue No.210; Bankruptcy Creditors' Service, Inc.,http://bankrupt.com/newsstand/or 215/945-7000)

ENRON CORP: EPMI Inks Pact Resolving CalPex Claim-------------------------------------------------Enron Power Marketing, Inc., and American Electric Power Service Corporation, et. al., ask the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement resolving the allocation of funds with respect to Claim No. 9112, filed by the California Power Exchange Corporation, for $16,221, plus certain unliquidated amounts.

(1) the distributions on account of the Funds, in connection with Claim No. 9112, will be made by the Clerk of the Bankruptcy Court, in accordance with the Distribution Schedule;

(2) future distributions on account of Claim No. 9112 will be made by EPMI, or its successor, in accordance with the Distribution Schedule; and

(3) EPMI and the Defendant Parties will have limited mutual releases with respect to Claim No. 9112.

Enron's counsel, Michael S. Etkin, Esq., at Lowenstein Sandler, PC, in New York, tells the Court that the creation of a steering committee of three Defendant Parties lead to the negotiation process and the vetting of various methods of allocation and distribution of the Funds.

The Settlement Agreement is not intended to hinder the Defendant Parties from becoming an opt-in participant to a Court-approved settlement between the Debtors and the Federal Energy Regulatory Commission in connection with Claim No. 9112, Mr. Etkin assures the Court. The Court had capped the maximum amount of Claim No. 9112 as an unsecured claim at $17,500,000.

Mr. Etkin explains that if any Defendant Party becomes an Opt-In Participant, and does not waive any right to payment in connection with the Enron-FERC Settlement, that Defendant Party is required to forfeit any payment received pursuant to the Settlement Agreement, for redistribution to the other Defendant Parties.

Mr. Etkin states that the Settlement Agreement clarifies that the Distribution Schedule is intended solely for the resolution of the adversary proceeding and the allocation of the Funds for Claim No. 9112, and the compromise is solely for the distribution on Claim No. 9112. The Distribution Schedule will not be considered as an admission, establishing precedent, or applicable to any proceeding or agreement other than the Settlement Agreement, Mr. Etkin clarifies.

With specific regard to the negotiations among the Defendant Parties, the defendants invited to participate were those who answered the complaint and:

(a) did not default in connection with the complaint;

(b) did not waive their right to participate in the allocation of Claim No. 9112; or

(c) did not formally acknowledge that they were not entitled to any allocation.

Mr. Etkin relates that only one entity that answered the complaint -- LG&E Energy Marketing, Inc. -- did not participate in the negotiations. Subsequent to the Defendant Parties reaching a resolution, LG&E asked the Steering Committee for a copy of the Settlement Agreement. Aside from LG&E, the Steering Committee is unaware of any other defendant who has not defaulted, waived its right, or acknowledged that it has no right to the allocation.

Mr. Etkin maintains that the Settlement Agreement falls within the range of reasonableness, and represents a benefit to creditors and all parties, and is in the best interests of the estate.

The Debtors filed their Chapter Plan and Disclosure Statement onJuly 11, 2003. On Jan. 9, 2004, they filed their fifth AmendedPlan and on the same day the Court approved the adequacy of theDisclosure Statement. On July 15, 2004, the Court confirmed theDebtors' Modified Fifth Amended Plan and that plan was declaredeffective on Nov. 17, 2004. (Enron Bankruptcy News, Issue No.210; Bankruptcy Creditors' Service, Inc.,http://bankrupt.com/newsstand/or 215/945-7000)

ENRON CORP: 5th Cir. Court Affirms Dismissal of 10 Investor Cases-----------------------------------------------------------------The U.S. Court of Appeals for the Fifth Circuit affirmed the U.S. District Court for the Southern District of Texas' dismissal of 10 cases arising from the collapse of the Enron Corporation, which cases were filed by former Enron Corp. investors against former Enron management, Enron's former accounting firm, as well as certain financial institutions.

District Judge Melinda Harmon dismissed the Fleming cases with prejudice after finding that they were preempted by the Securities Litigation Uniform Standards Act. The Fleming plaintiffs sought to bring claims under state securities law only, and the District Court held that SLUSA preempts all those state claims.

Fleming appealed Judge Harmon's order arguing that the District Court had no authority to dismiss their cases with prejudice because it lacked subject matter jurisdiction over them. Fleming pointed out that "related to" bankruptcy jurisdiction was the sole basis for federal jurisdiction over its state law claims, and thus, federal jurisdiction ceased to exist over them upon the confirmation of Enron's Plan of Reorganization.

Appellate Court Judge Emilio M. Garza held that Section 1334 does not expressly limit bankruptcy jurisdiction upon plan confirmation. Other Circuit Courts agreed, holding that "if 'related to' jurisdiction actually existed at the time of . . . removal" subsequent events "cannot divest the district court of that subject matter jurisdiction." Judge Garza pointed out that Fleming cannot point to a single case in which the Fifth Circuit have held that plan confirmation divests a District Court of bankruptcy jurisdiction over pre-confirmation claims, based on pre-confirmation activities that properly had been removed pursuant to "related to" jurisdiction. Thus, the Fifth Circuit held that the District Court had bankruptcy jurisdiction over the Fleming plaintiffs' claims at the time it dismissed them with prejudice.

Judge Garza said that, applying the principles used in In re WorldCom, 308 F. Supp. 2d at 238, the Fleming cases plainly fall within the definition of a "covered class action," and therefore SLUSA preempts their claims unless some other consideration saves them from preemption.

In a last-ditch effort to salvage their preempted claims, the Fleming plaintiffs argued that preempting their claims lead to an "absurd result" that contravenes SLUSA's purposes and places SLUSA on a collision course with the multi-district litigation, Judge Garza notes. "The Fleming plaintiffs are incorrect."

Judge Garza explained that the stated purpose of SLUSA is "to prevent" not to preserve "certain State private securities class action lawsuits alleging fraud from being used to frustrate the objectives of the Private Securities Litigation Reform Act. He added that Fleming ignores the fact that 172 of their 196 plaintiffs are before the Southern District of Texas by virtue of direct filing or direct removal, not the MDL.

Accordingly, the Fifth Circuit held that the District Court properly dismissed the Fleming cases with prejudice.

"The Fleming firm purports to represent several hundred clients with claims arising out of Enron's collapse, but, according to Judge Garza, Fleming's performance "has been less than exemplary."

The Debtors filed their Chapter Plan and Disclosure Statement onJuly 11, 2003. On Jan. 9, 2004, they filed their fifth AmendedPlan and on the same day the Court approved the adequacy of theDisclosure Statement. On July 15, 2004, the Court confirmed theDebtors' Modified Fifth Amended Plan and that plan was declaredeffective on Nov. 17, 2004. (Enron Bankruptcy News, Issue No.210; Bankruptcy Creditors' Service, Inc.,http://bankrupt.com/newsstand/or 215/945-7000)

ENRON CORP: Resolves $15 Million MARAD Claim Through Stipulation----------------------------------------------------------------Enron Creditors Recovery Corp., and the U.S. Department of Transportation, Maritime Administration, entered into a stipulation -- approved by the U.S. Bankruptcy Court for the Southern District of New York -- that resolves a $15 million- claim.

The stipulation provides that Claim No. 24788 will be reduced, with prejudice, to $15,741,677, representing the outstanding principal amount of the Corinto Bonds as of April 16, 2008, plus the interest to accrue and become due under the amortization of the Corinto Bonds. The Claim will be further reduced, with prejudice, upon payment on Oct. 15, 2008, to the Corinto Bondholders of the principal and interest with respect to the Corinto Bonds. Following the verification of payment on April 15, 2009, with respect to the Corinto Bonds, the Claim will be deemed withdrawn, with prejudice.

If prior to the withdrawal of Claim No. 24788, (i) an event of default occurs, and (ii) the amount contained in the Reserve Fund is insufficient to reimburse MARAD for out-of-pocket amounts, then, the amount of the Claim will be the amount of the deficiency, and the Claim will be allowed in that amount.

No funds need to be reserved in the Disputed Claims Reserve on account of Claim No. 24788 and MARAD will look solely to the Tax Refund for recovery. The Internal Revenue Service will pay Enron an amount equal to (a) the sum of the Tax Refund and the Reserve Fund, plus accrued interest, minus $15,741,677. The IRS will also pay an amount equal to the October 2008 Payment and an amount equal to the balance of the Tax Refund, plus accrued interest, following April 15, 2009. Upon payment of the Tax Refund, the IRS will be released from all obligations.

The Letter of Credit will be deemed withdrawn, without prejudice to MARAD's limited right to a setoff against the Tax Refund. The Stipulation will have no effect on MARAD's rights in connection with the Reserve Fund or against Empresa Energetica Corinto, Ltd., or any other person not a party to the Stipulation.

The Debtors filed their Chapter Plan and Disclosure Statement onJuly 11, 2003. On Jan. 9, 2004, they filed their fifth AmendedPlan and on the same day the Court approved the adequacy of theDisclosure Statement. On July 15, 2004, the Court confirmed theDebtors' Modified Fifth Amended Plan and that plan was declaredeffective on Nov. 17, 2004. (Enron Bankruptcy News, Issue No.210; Bankruptcy Creditors' Service, Inc.,http://bankrupt.com/newsstand/or 215/945-7000)

Pursuant to Article 14(2)(a) of the UNCITRAL Model Law on Cross-Border Insolvency as set out in the Cross-Border Insolvency Regulations 2006, a court order dated July 2, 2008, has directed the joint administrators of EOS Airlines to notify foreign creditors that a copy of the joint administrators' proposals can be obtained from http://www.kccllc.net/eosairlines

About EOS Airlines

Based in Purchase, New York, EOS Airlines, Inc. --http://www.eosairlines.com/-- is a transatlantic airline. The company filed for Chapter 11 protection April 26, 2008 (Bankr.S.D.N.Y. Case No.08-22581). Stephen D. Lerner, Esq., at SquireSanders & Dempsey, LLP, represents the Debtor in itsrestructuring efforts. The Debtor selected Kurztman CarsonConsultants LLC as claims agent. The U.S. Trustee for Region 2appointed creditors to serve on an Official Committee ofUnsecured Creditors. Joseph M. Vann, Esq., and Robert A.Boghosian, Esq., at Cohen Tauber Spievack & Wagner P.C. in NewYork, represent the Committee in this case.

Menzies Corporate Restructuring has been appointed as jointadministrators in the U.K.

When the Debtor filed for protection against it creditors, itlisted total assets of $70,233,455 and total debts of $34,858,485.

EPICEPT CORP: Prices Public Offering of 2 Million Shares of Stock-----------------------------------------------------------------EpiCept Corporation priced the public offering of 2 million shares of its common stock at $0.25 per share and five-year warrants to purchase up to 2 million shares of common stock at an exercise price of $0.39 per share. EpiCept will receive approximately $0.5 million in net proceeds from the offering.

As reported in the Troubled Company Reporter on June 30, 2008,EpiCept disclosed a public offering of up to 10 million shares of its common stock, par value $0.0001 per share, warrants to purchase up to 10 million shares of its common stock and the issuance of such shares upon exercise of the warrants. EpiCept intends to use the net proceeds it receives to meet its working capital needs and general corporate purposes through July 2008 and to pay certain fees owed to Hercules Technology Growth Capital Inc.

In July 8, TCR said that EpiCept Corporation priced a public offering of approximately 8 million shares of its common stock at $.25 per share and five-year warrants to purchase up to approximately 8 million shares of common stock at an exerciseprice of $.39 per share. EpiCept will receive approximately$1.9 million in net proceeds from the offering.

Rodman & Renshaw LLC, a subsidiary of Rodman & Renshaw Capital Group Inc. acted as the exclusive placement agent for the offering.

The proposed public offering is being made pursuant to an effective registration statement, and may be made only by means of a prospectus and prospectus supplement. A copy of the prospectus supplement relating to the common stock and warrants can be obtained from:

Based in Tarrytown, New York, EpiCept Corporation (NASDAQ:EPCT) -- http://www.epicept.com/-- is a specialty pharmaceutical company focused on the development of pharmaceutical products for the treatment of cancer and pain. The company has a portfolio of five product candidates in active stages of development. It includes an oncology product candidate submitted for European registration, two oncology compounds, a pain product candidate for the treatment of peripheral neuropathies and another pain product candidate for the treatment of acute back pain. The two wholly owned subsidiaries of the company are Maxim, based in San Diego, California, and EpiCept GmbH, based in Munich, Germany, which are engaged in research and development activities.

EpiCept Corp.'s consolidated balance sheet at March 31, 2008,showed a stockholders' deficit of $15,570,000, compared to adeficit of $14.1 million at Dec. 31, 2007.

Going Concern Doubt

Deloitte & Touche LLP, in Parsippany, New Jersey, expressedsubstantial doubt about EpiCept Corp.'s ability to continue as agoing concern after auditing the company's consolidated financialstatements for the year ended Dec. 31, 2007. The auditing firmpointed to the company's recurring losses from operations andstockholders' deficit.

The company disclosed in its Form 10-Q for the first quarter endedMarch 31, 2008, that to date it has not generated any meaningfulrevenues from the sale of products and may not generate any suchrevenues for a number of years, if at all. As a result, thecompany has an accumulated deficit of $176,926,000 as of March 31,2008, and may incur operating losses for a number of years.

FIELDSTONE MORTGAGE: Judge Schneider Confirms Revised Plan----------------------------------------------------------The Hon. James F. Schneider of the U.S. Bankruptcy Court for the District of Maryland confirmed Fieldstone Mortgage Company's revised plan of reorganization.

The Debtor filed its reorganization plan on April 14, 2008, and filed a revised plan on July 11, 2008. The Court entered an order approving the Debtor's disclosure statement describing the plan on May 30, 2008.

Tarrant County, City of Memphis, Harris County, Grayson County, City of Frisco and United States Department of Housing and Urban Development jointly filed preliminary objections to the revised plan. Liberty Mutual Insurance Company filed a preliminary and final objections to the revised plan, which Liberty subsequently withdrew.

The Official Committee of Unsecured Creditors filed a preliminary objection to the revised plan. The objections of the Creditors' Committee was resolved by making further revisions to the revised plan.

Treatment of Claims

Class 1 obligations claims is unimpaired by the revised plan and holders are conclusively presumed to have accepted the revised plan. Class 2 convenience claims and class 3 general unsecured claims have voted to accept the revised plan. Class 4 equity interests and class 5 510 claims are deemed to have rejected the revised plan.

Class 2 claims will receive 35% of the amount of allowed convenience claim. Class 3 claims will receive its pro rate share of the beneficial interest in the plan trust. The beneficial interests in the plan trust are not transferable.

Plan trust is created to carry out certain provisions of the plan. Two trustees under a plan trust agreement are selected by the Debtor and the other by the Creditors' Committee.

Revesting of Assets

After the effective date of the plan, the reorganized Debtor will continue to exist as a separate legal entity. On and after the effective date, all property and assets of the estate of the Debtor, except trust assets and other assets acquired in connection with the revised plan, will vest in the reorganized Debtor under the revised plan.

About Fieldstone Mortgage

Headquartered in Columbia, Maryland, Fieldstone Mortgage Co. --http://www.fieldstonemortgage.com/-- is a direct lender that offers mortgage loans for multiple credit situations in the UnitedStates. In September 2007, Fieldstone was the target of a lawsuitby Morgan Stanley over 72 mortgages worth $26.5 million that hadno, or late, payments.

FORD MOTOR: Moody's Holds Neg Outlook on Corporate Family Rating----------------------------------------------------------------Moody's Investors Service is maintaining its negative outlook on the ratings of Ford Motor Company, which has a B3 Corporate Family Rating, and Ford Motor Credit Company, whose Senior Unsecured Rating is B1.

The business prospects for the North American auto industry continue to deteriorate as the economy weakens and fuel prices are sustained at record high levels. With product offerings overly weighted in trucks and SUV's, the Big-3 U.S. auto makers, including Ford, are particularly vulnerable in this environment.

Moody's ratings and outlook for Ford have considered the likelihood that the company will not be able to achieve break-even earnings through 2009, and that the company will continue to experience a combined automotive operating cash burn for 2008 and 2009 that will exceed $12 to $14 billion.

The ratings have also considered that Ford's $40.6 billion liquidity position, consisting of $28.7 billion in cash and $11.9 billion in availability under committed credit facilities, provides an incremental level of financial flexibility for the company during this challenging period.

Moody's will continue to monitor developments in Ford's efforts to adjust its business profile to contend with the evolving market conditions. The rating outlook remains negative. Absent developments that indicate that Ford will be able to maintain an adequate liquidity profile, while implementing restructuring actions that improve earnings and cash flow and rebuild its long term product competitiveness, the ratings could be subject to downgrade.

Headquartered in Dearborn, Michigan, Ford Motor Company is a leading global automotive manufacturer.

GEORGIA GULF: To Pay $1MM to Cure Default on 7-1/8% Senior Notes----------------------------------------------------------------Georgia Gulf Corporation entered into a settlement agreement with certain holders of its 7-1/8% senior notes due 2013 who submitted a notice of default on June 6, 2008. The company has agreed to pay $1.4 million of the legal fees of the signing holders.

Approval of the lenders under the company's bank credit agreement is required for the consent fee payment and the 2003 Indenture amendment.

In connection with the settlement agreement, the signing holders have delivered to the trustee for the 7-1/8% notes a notice of withdrawal of the notice of default dated June 6, 2008, and the company and those holders will file for dismissal of the related litigation.

In connection with, among other things, the payment will result in the dismissal of the litigation and certain restrictions and obligations of the signing holders with regard to their holdings of the company's securities.

The company intends to solicit the consents of all holders of the 7-1/8% notes to the amendment and has agreed to pay a fee of $1.5 million to all consenting note holders pro rata to their respective holdings.

The signing holders and an additional holder of the notes, who together hold a majority in principal amount of the 7-1/8% notes, have delivered to the company consents to an amendment to the related indenture. The amendment, once effective, will amend certain covenants in the indenture, and provide a waiver of defaults, if any.

As reported in the Troubled company Reporter on May 12, 2008,Standard & Poor's Ratings Services lowered its ratings on GeorgiaGulf Corp. by one notch, including its corporate credit rating to'CCC+' from 'B-'. The outlook is negative.

GENERAL MOTORS: Moody's Reviews Low B and C Ratings for Likely Cut------------------------------------------------------------------Moody's Investors Service is reviewing the ratings of General Motors Corporation for possible downgrade. Ratings under review include its B3 Corporate Family Rating, B3 Probability of Default Rating, Ba3 rating for secured debt, and Caa1 rating for senior unsecured debt.

The review is focusing on the degree to which GM's recently disclosed initiatives to boost liquidity by $15 billion, combined with its $24 billion in cash and $7 billion in committed credit facilities, will cover the substantial cash requirements the company will face until it adequately adjusts it production and pricing structure to accommodate the US auto market's shift away from trucks and SUVs.

The company must also contend with the possibility of overall automotive demand remaining depressed through 2009 due to continued record-high fuel costs, a soft economy, and deteriorating consumer confidence.

GM's Speculative Grade Liquidity rating was lowered to SGL-2 from SGL-1. The lower rating reflects Moody's view that despite the fact that the company's liquidity is more than adequate to cover all requirements over the coming twelve months and could be further enhanced, the magnitude and duration of the company's operating cash burn will not be supportive of the highest Speculative Grade Liquidity rating.

The ratings of GMAC (B3/Negative) and ResCap (Ca/Rev. Pos. downgrade) are not affected by these actions.

"Despite the very constructive nature of the initiatives announced by GM," Bruce Clark, senior vice president with Moody's said, "the company will continue to face the significant challenge of building enough profitability in its car and crossover portfolio to make up for the earnings that will no longer be generated on the truck and SUV side."

"Establishing an adequate level of profitability throughout a car portfolio that has historically been priced at a significant discount relative to competing models from Asia will be a difficult and long-term undertaking. GM will likely face a sizable cash burn until it gets this part of the equation right," Mr. Clark continued.

Headquartered in Detroit, Michigan, General Motors Corporation is the world's second-largest automotive manufacturer.

GENERAL MOTORS: Posts Record Quarterly Sales in LAAM Region-----------------------------------------------------------General Motors Latin America, Africa and Middle East (GM LAAM) region broke another record in Q2 2008 selling 346,100 vehicles, up 52,100 units over the same period in 2007. GM's volume increase of nearly 18 percent for the quarter again exceeded the industry growth rate of 13 percent. In addition, GM's market share in the region climbed to 17.5 percent for the quarter, up 0.7 share points year-over-year.

Maureen Kempston Darkes, GM group vice president and president of GM LAAM said, "The strong performance of GM's global products in our markets, combined with our strong local manufacturing presence, is enabling us to grow our sales volume and market share faster than the industry in these emerging markets."

"Strong demand for our Chevrolet products, such as the Chevrolet Corsa, Celta and Aveo fueled our growth throughout the region," Kempston Darkes continued. Those vehicles continued as the top three sellers across the region in Q2 2008, representing 40 percent of GM sales.

For the first half of 2008, GM sold 670,100 units in the Latin America, Africa and Middle East region. This represents an increase of nearly 19 percent, or 105,700 units, year-over-year. GM's market share through June stands at 17.5 percent, up nearly a share point over the first half of 2007. Collectively, GM sales were up a total of 36 percent in Africa, 17 percent in South America and 7 percent in the Middle East.

About General Motors

Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars andtrucks in 35 countries. In 2007, nearly 9.37 million GM cars andtrucks were sold globally under the following brands: Buick,Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel,Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStarsubsidiary is the industry leader in vehicle safety, security andinformation services.

At March 31, 2008, GM's balance sheet showed total assets of$145,741,000,000 and total debts of $186,784,000,000, resulting ina stockholders' deficit of $41,043,000,000. Deficit, at Dec. 31,2007, and March 31, 2007, was $37,094,000,000 and $4,558,000,000,respectively.

As reported in the Troubled Company Reporter on June 24, 2008,DBRS has placed the ratings of General Motors Corporation andGeneral Motors of Canada Limited Under Review with NegativeImplications. The rating action reflects the structuraldeterioration of the company's operations in North America broughton by high oil prices and a slowing U.S. economy.

Standard & Poor's Ratings Services is placing its corporate creditratings on the three U.S. automakers, General Motors Corp., FordMotor Co., and Chrysler LLC, on CreditWatch with negativeimplications, citing the need to evaluate the financial damagebeing inflicted by deteriorating U.S. industry conditions--largelyas a result of high gasoline prices. Included in the CreditWatchplacement are the finance units Ford Motor Credit Co. andDaimlerChrysler Financial Services Americas LLC, as well as GM's49%-owned finance affiliate GMAC LLC.

As related in the Troubled Company Reporter on June 5, 2008,Standard & Poor's Ratings Services said that its ratings onGeneral Motors Corp. (B/Negative/B-3) are not immediately affectedby the company's announcement that it will cease production atfour North American truck plants over the next two years. Theseclosures are in response to the re-energized shift in consumerdemand away from light trucks. GM previously said only one shiftwas being eliminated at each of the four truck plants. Productionis being increased at plants producing small and midsize cars, butthe cash contribution margin from these smaller vehicles is farless than that of light trucks.

GMAC LLC: Gets 10-Yr Waiver from FDIC to Dispose of Banking Unit----------------------------------------------------------------GMAC Financial Services on Wednesday said the Federal Deposit Insurance Corporation has granted a 10-year extension of GMAC Bank's current ownership by extending the existing disposition requirement that was established in connection with the sale of a majority stake in GMAC.

The Wall Street Journal's Aparajita Saha-Bubna says the FDIC's decision was a much needed boost for GMAC, which allows the financing arm of General Motors Corp. to raise funds at competitive rates.

GM owns a 49% stake in GMAC after selling 51% of GMAC to a group of investors led by Cerberus Capital Management LP in 2006 for about $14 billion.

"We are very pleased with the FDIC's prompt action on our waiver request," said GMAC Chief Executive Officer Alvaro G. de Molina. "The long-term extension granted by the FDIC will permit us to strengthen GMAC Bank, which provides an important source of funding for mortgage and automotive financing activities.

"This development along with the successful completion of the global refinancing announced last month helps to enhance flexibility during this turbulent market environment," said de Molina.

The FDIC's action includes requirements related to capital levels at GMAC Bank and the company as a whole.

"It's a positive on the funding side," said Richard Hofmann, an analyst at independent research firm CreditSights, according to the Journal. Mr. Hofmann, the Journal quotes, said GMAC Bank has "become a more critical funding source for the company as the credit crisis has heightened," citing that "[a] bank is an easier way to bring in funding at a very competitive price."

GMAC Bank, according to the Journal, is a so-called industrial-loan corporation, which are FDIC-supervised lenders that offer a way for commercial firms to own banks without being regulated by a federal banking agency.

According to the Journal, when Cerberus bought a 51% GMAC stake, the FDIC had imposed a moratorium on the approval of banks owned by nonfinancial companies, like Wal-Mart Stores Inc., to allow Congress to debate the issue of mixing banking and commerce. Despite the freeze, the Journal continues, the FDIC granted Cerberus and GMAC's application because of "the unique circumstances" of GM's restructuring. In exchange, GMAC and Cerberus were to satisfy one of several conditions by November:

-- sell GMAC Bank;

-- have the bank cease using FDIC insurance; or

-- register as a bank holding company.

If none of these terms could be achieved, Cerberus would have to get an FDIC waiver, the Journal says.

FDIC Waiver Good for Rescap Too

According to the Journal, as the credit crunch has made short-term financing costly and scarce, GMAC Bank's $15.3 billion in deposits and $10.8 billion in Federal Home Loan Bank advances have become increasingly important sources of stable, low-cost funding, particularly for Residential Capital LLC, GMAC's struggling mortgage subsidiary.

Mr. Hofmann, the Journal relates, said the FDIC waiver is important for ResCap because it has difficulty getting funds on an unsecured basis.

"Look at GMAC bank, it's loaded up with mortgages," the Journal quotes Mr. Hofmann as saying.

The Journal says more than two-thirds of GMAC Bank's $30.3 billion assets as of the first quarter were made up of mortgage assets as prime loans, which are made to those with strong credit. GMAC Bank accounted for about 30% of ResCap's funding in 2007, the Journal says.

About ResCap

Headquartered in Minneapolis, Minnesota, Residential Capital LLC-- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMACLLC.

About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financialservices company that operates in approximately 40 countries inautomotive finance, real estate finance, insurance and othercommercial businesses. GMAC was established in 1919 and employsapproximately 26,700 people worldwide.

GMAC Financial Services is in turn wholly owned by GMAC LLC.

Cerberus Capital Management LP led a group of investors that bought a 51% stake in GMAC LLC from General Motors Corp. in December 2006 for $14 billion.

* * *

As reported by the Troubled Company Reporter on June 4, 2008, Fitch Ratings has downgraded the long-term Issuer Default Rating of GMAC LLC and related subsidiaries to 'BB-' from 'BB'. Fitch has also downgraded GMAC's unsecured long-term ratings to 'B+' from 'BB-', reflecting the potential for reduced recovery in a default scenario should the company encumber assets. Additionally, Fitch has affirmed the 'B' short-term ratings. The Rating Outlook remains Negative.

As reported in the Troubled Company Reporter on April 25, 2008,Moody's Investors Service downgraded GMAC LLC's senior rating toB2 from B1; the rating remains on review for further possibledowngrade. This action follows Moody's rating downgrade of ResCapLLC, GMAC's wholly owned residential mortgage unit, to Caa1 fromB2.

GREY WOLF: Shareholders Snub Merger with Basic, Terminate Deal --------------------------------------------------------------Grey Wolf Inc. terminated its merger agreement with Basic Energy Services Inc. Grey Wolf disclosed that its proposed merger did not receive sufficient votes from Grey Wolf shareholders at its special meeting of shareholders held July 15.

As reported in the Troubled Company Reporter on July 14, 2008,Precision Drilling Trust said it will ask Grey Wolf's boardof directors to reconsider its $10.00 per share buyout offer ifGrey Wolf shareholders reject a proposed merger with Basic.

In light of this development, the board of directors of Grey Wolf plans to review the company's alternatives for enhancing shareholder value. This review will include an update to the company's existing strategic plan and will encompass consideration of continued internal growth by remaining independent, acquisitions, mergers, sale of the company, strategic alliances, joint ventures and financial alternatives.

The board has engaged UBS Investment Bank as its independent financial advisor to assist the Company in conducting this review.

"Grey Wolf remains fully committed to enhancing shareholder value. After thorough consideration, Grey Wolf's board believed that the addition of Basic's complementary business and assets would have been an excellent strategic fit for us and would have created significant value," Thomas P. Richards, chairman, president and CEO of Grey Wolf, said.

"The board will now continue to consider other alternatives to enhance shareholder value and it will do so in an environment of strong commodity prices, a related strengthening in the onshore U.S. lower 48 drilling market and the potential inherent in Grey Wolf's asset base," Mr. Richards continued.

The company cautions shareholders that there is no assurance that the review will result in any specific transaction and no timetable has been set for its completion. The company does not intend to disclose developments relating to this review unless and until its board approves a specific agreement or transaction.

The company will also take a pre-tax charge to earnings of approximately $17.00 million or approximately $.05 per diluted share during the third quarter of this year as a result of the shareholder vote and related termination of the merger agreement.

About Precision Drilling Trust

Precision Drilling Trust (NYSE:PDS and TSX:PD.UN) is anunincorporated open-ended investment trust established under thelaws of the Province of Alberta, Canada.

About Grey Wolf

Headquartered in Houston, Texas, Grey Wolf Inc. (AMEX: GW) --http://www.gwdrilling.com/-- provides turnkey and contract oil and gas land drilling services in the best natural gas producingregions in the United States with a current drilling rig fleet of121, which will increase to 123 with the expected addition of twonew rigs in 2008.

The confirmed ratings are the Ba3 corporate family rating, the Ba3 probability of default rating, and the B1 (LGD 4, 61%) rating on the senior unsecured convertible notes. This concludes the review for possible upgrade initiated on April 21, 2008 in response to the statement of the merger with Basic Energy. The outlook is developing.

Simultaneously, Moody's withdrew the ratings for Horsepower Holdings, Inc., the entity formed to be the holding company to facilitate the merger with Basic Energy. The ratings being withdrawn for HHI are the Ba2 CFR, the Ba2 PDR, the Ba1 (LGD 3, 39%) to the proposed $925 million of first lien credit facilities, and the SGL-2 rating.

The developing outlook for GW reflects the uncertainty surrounding the company's initiation of a strategic review to enhance shareholder value following the shareholder's vote against the merger with Basic Energy. GW has already received a competing bid to buy the company from Precision Drilling Trust; however, GW's management is evaluating all alternatives.

There is no specific timetable for the completion of this review and it will consider remaining independent, completing acquisitions, mergers, a sale of the company, strategic alliances, joint ventures, and financial alternatives. Resolution of the outlook will depend on the final decision by GW's Board of Directors regarding its strategy and what the potential impact will be to the note holders.

The confirmation of the Ba3 reflects the company's conservative financial policies evidenced by its very low leverage and history of carrying significant cash balances. In addition, the Ba3 reflects the company's focus as a natural gas driller with a fleet contains a large number of rigs that can perform complex drilling which is important to the very hot unconventional resource plays in North America.

Given the capital deployed to these plays by a number of exploration and production companies and the supportive natural gas price outlook, Moody's expects drilling activity to remain strong into 2009. This will likely keep day rates and utilization healthy, thus driving earnings and cash flows that will result in credit metrics in line with the Ba rated peer group.

The Ba3 CFR remains restrained by the company's comparatively small scale relative to other Ba3 rated drillers and oilfield services companies. The Ba3 also considers the inherent volatility in the drilling business which is tied to commodity prices and the capital spending patterns of the E&P sector, as well as the company's concentration in the more volatile North American market.

HANCOCK FABRICS: U.S. Trustee Protests Joint Chapter 11 Plan------------------------------------------------------------Roberta A. DeAngelis, acting Unites States Trustee for Region 3, asks the United States Bankruptcy Court for the District of Delaware to deny confirmation of the Joint Consolidated Plan of Reorganization of Hancock Fabrics Inc. and its debtor-affiliates.

Separately, 17 ad valorem tax appraisal agencies in the state of Texas object to the confirmation of the Debtors' Plan due to their non-compliance with the provisions under Section 1129(b)(1) and (2)(A) of the Bankruptcy Code:

The U.S. Trustee complains that the exculpation clause and the provisions for limitation of liability in the Plan acquits several parties from liability, including the Debtors' non-debtor affiliates, members, stockholders, advisors, agents, attorneys and other professionals, for several events related to prepetition, postpetition and non-bankruptcy related conduct, as well as, future events yet to have occurred in the context of the confirmation of the Plan.

Richard L. Schepacarter, Esq., trial attorney for the Office of the U.S. Trustee, in Wilmington, Delaware, asserts that the Debtors must show that for each party seeking to obtain exculpation:

1. an identity of interest between the debtor and the third party, so that a suit against the non-debtor is, in essence, a suit against the debtor or will deplete assets of the estate;

2. substantial contribution by the non-debtor of assets to the reorganization;

3. the essential nature of the injunction to the reorganization to the extent that, without the injunction, there is little likelihood of success;

4. an agreement by a substantial majority of creditors to support the injunction, specifically if the impacted class or classes "overwhelmingly" votes to accept the plan; and

5. provision in the plan for payment of all or substantially all of the class or classes affected by the injunction.

The U.S. Trustee further complains that the Plan allows for the reasonable fees and expenses of the Ad Hoc Equity Committee to be paid but improperly asserts that no party may object to the fees or expenses on the grounds that the Ad Hoc Equity Committee -- the unofficial committee formed by certain holders of stock interests in Hancock Fabrics, Inc., that was in existence from the Petition Date through the date the Official Committee of Equity Security Holders was appointed -- or its professionals did not make a substantial contribution to the reorganization cases.

According to Mr. Schepacarter, Section 503(b)(3)(D) and (b)(4) of the Bankruptcy Code provides for the allowance of administrative expenses of a committee other than the committee appointed under Section 1102 provided that that committee has made a substantial contribution to the debtor's bankruptcy case. He asserts that the Plan provision allowing the Ad Hoc Committee's Fees should be stricken and the Ad Hoc Equity Committee or its Professionals should file with the Court an appropriate and legally sufficient application for payment of administrative expenses in accordance with applicable law that satisfies and meets the prescripts of Sections 503(b)(3)(D) and 503(b)(4) and any relevant case law.

Plan

As reported in the Troubled Company Reporter on July 4, 2008, the Debtors delivered on June 10, 2008, to the Court a joint consolidated Chapter 11 plan of reorganization.

Under the plan, among other things, general unsecured creditorswill receive cash equal to 104.93% of their claims.

The Debtors' Plan is financed in part by a rights offering toraise $20,000,000. The offering to current shareholders is forfive-year floating rate notes to be secured by a lien on assetsjunior to the bank financing. Hancock will have the right for thefirst year to pay interest with more notes.

The sale of the $20,000,000 in notes is being backstopped bySopris Capital Partners LP, Berg & Berg Enterprises, LLC, andTrellus Management, which are obligated to purchase any of the notes not bought by shareholders.

The Debtors have also secured a $100,000,000 commitment for a exitrevolving credit from General Electric Capital Corp. Thecommitment will expire if Hancock won't have the Chapter 11 planconfirmed and won't emerged from reorganization by August 29,2008.

The Court scheduled a hearing to consider confirmation of the Debtors' Plan for July 22, 2008, at 10:00 a.m., Eastern Time. Objections, if any, were due July 15,2008, 4:00 p.m., Eastern Time.

About Hancock Fabrics

Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc.(OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decoratingtextiles, sewing accessories, needlecraft supplies and sewingmachines. Hancock Fabrics is one of the largest fabric retailersin the United States, currently operating approximately 400 retailstores in approximately 40 states. The company employsapproximately 7,500 people on a full-time and part-time basis.Most of the company's employees work in its retail stores, or infield management to support its retail stores.

The company and six of its debtor-affiliates filed for chapter 11protection on March 21, 2007 (Bankr. D. Del. Lead Case No.07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht &Tunnell, represent the Debtors. The U.S. Trustee for Region 3appointed five creditors to serve on an Official Committee ofUnsecured Creditors. As of Sept. 1, 2007, HancockFabrics disclosed total assets of $159,673,000 and totalliabilities of 122,316,000.

HOLOGIC INC: Moody's Affirms Ba3 Corporate Family Rating--------------------------------------------------------Moody's Investors Service assigned Baa3 ratings to Hologic, Inc.'s amended and restated $800 million senior secured credit facilities, a portion of which will be used to finance the acquisition of Third Wave Technologies.

At the same time, Moody's affirmed Hologic's existing ratings. The ratings outlook is stable. Moody's expects to withdraw the ratings on Hologic's existing facilities upon the closing of the Third Wave transaction.

Moody's affirmation is based on our expectation that Hologic will continue to generate relatively good cash flow, which should enable the company to repay debt associated with this transaction over a two to three year period. Moody's also recognizes the strategic fit of this transaction as Third Wave's pending HPV test will be a natural extension of Hologic's ThinPrep pap tests.

Although Moody's did not anticipate an acquisition of this size so soon after the Cytyc transaction, Hologic's relatively rapid repayment of debt provides some flexibility at the current rating level. Although cash flow generation has been favorable, a significant portion of this repayment was attributed to option exercise proceeds as well as excess cash from the Cytyc financing.

The stable outlook assumes that Hologic will: (1) refrain from other debt-financed acquisitions until it has repaid a significant portion of the debt associated with Third Wave; and (2) de-leverage such that the company can achieve and sustain free cash flow to debt greater than 10%.

Hologic is a leading developer, manufacturer and supplier of diagnostic and medical imaging systems primarily dedicated to serving the healthcare needs of women. The company is focused on mammography and breast care technologies as well as on osteoporosis assessment.

In October 2007, Hologic completed the acquisition of Cytyc, a medical device company that develops, manufactures and markets diagnostic and surgical products that address a range of women's health applications including cervical cancer screening, treatment of excessive menstrual bleeding and radiation treatment of early-stage breast cancer.

HUNTSMAN CORP: Hexion Acquisition Proposal Gets EC Conditional Nod------------------------------------------------------------------The European Commission issued a decision that would permit Hexion Specialty Chemicals, Inc.'s acquisition of Huntsman Corp., contingent on, among other things, divestment of a portion of the company's global specialty epoxy resins business to a purchaser approved by the European Commission.

Background

As reported by the Troubled Company Reporter on July 13, 2007,Huntsman agreed to a definitive merger agreement with HexionSpecialty, pursuant to a transaction with a total value ofapproximately $10.6 billion, including the assumption of debt.

Under the terms of the agreement, Hexion will acquire all of theoutstanding common stock of Huntsman for $28 per share in cash.The agreement also provides that the cash price per share to bepaid by Hexion will increase at the rate of 8% per annum beginning270 days from July 12, 2007.

Huntsman has terminated the merger agreement with Basell AFbelieving that the Hexion transaction was a superior proposal. The Hexion deal was unanimously approved by the board of directorsof Huntsman.

The transaction is subject to customary closing conditions,including regulatory approval in the U.S. and in Europe, well asthe approval of Huntsman shareholders. Entities controlled byMatlinPatterson and the Huntsman family and a Huntsman charitabletrust, who collectively own approximately 57% of Huntsman's commonstock, have agreed to vote in favor of the transaction.

The transaction is not subject to a financing condition andcommitments have been obtained by Hexion for all necessary debtfinancing from affiliates of Credit Suisse and Deutsche Bank AG. Hexion will have up to 12 months, subject to a 90 day extension bythe Huntsman board under certain circumstances, to close thetransaction.

The Delaware Court of Chancery has granted Huntsman Corporation'srequest to expedite the Court's review of Hexion SpecialtyChemicals Inc.'s efforts to abandon Hexion's pending merger withHuntsman. The trial will begin on Sept. 8, 2008.

Extension of Merger Termination Date

On Jan. 29, 2008, the TCR reported that Hexion informed Huntsmanthat it will exercise its right to extend the termination date by90 days from April 5 to July 4, 2008.

On April 5, 2008, Hexion Specialty Chemicals Inc. exercised anoption under its merger agreement with Huntsman Corporation datedas of July 12, 2007, extending the merger agreement terminationdate by 90 days, to July 4, 2008.

The TCR related on July 3, 2008, Huntsman's board of directors, unanimously, provisionally authorized Huntsman Corp. to exercise its right to extend the merger agreement with Hexion Specialty by an additional 90 days to Oct. 2, 2008, as permitted by the terms of the merger agreement.

Hexion's Lawsuit to Cancel Merger

On June 19, the TCR reported that Hexion and related entitiesfiled a suit in the Delaware Court of Chancery to cancel theagreement. Hexion said in the suit that it believes that thecapital structure agreed to by Huntsman and Hexion for thecombined company is no longer viable because of Huntsman'sincreased net debt and its lower than expected earnings. Whileboth companies individually are solvent, Hexion believes thatconsummating the merger on the basis of the capital structureagreed to with Huntsman would render the combined companyinsolvent.

Comments and Responses

Hexion said that the company and Apollo Management L.P. received aletter from Peter Huntsman, Huntsman Corporation's president andCEO, stating that their actions were inconsistent with the termsof the merger agreement.

Huntsman is violating its obligations to Huntsman Corp. by seekingto cancel the transaction, Bloomberg relates according to Mr.Huntsman. Mr. Huntsman reportedly stated that the actions appearto be a blatant attempt to deprive its shareholders of thebenefits of the Merger Agreement that was agreed to nearly a yearago.

Huntsman's Countersuit

Reports say Huntsman has filed a countersuit against ApolloManagement and two of its founders in Texas state court, alleginginterference with its merger with Hexion Specialty Chemicals, anApollo company. Huntsman is seeking a jury trial in Texas todetermine liability for "actual damages exceeding USD 3 bn, plusexemplary damages," according to Plasteurope (Germany).

In response, Hexion said: "It is unfortunate that Huntsman haschosen to file a baseless lawsuit against Apollo and to personallysue two of its principals. Huntsman's Texas suit violates a clearprovision of the merger agreement which requires that anylitigation be brought exclusively in the State of Delaware. As wealleged in our suit, primarily due to Huntsman's underperformance,we believe that consummating the merger on the basis of thecapital structure agreed to with Huntsman would render thecombined company insolvent. In fact, Huntsman's suit does notdispute that the combined company would be insolvent. We believeHuntsman's lawsuit is wholly without merit."

About Huntsman Corporation

Headquartered in Salt Lake City, Utah, Huntsman Corporation(NYSE:HUN) -- http://www.huntsman.com/-- is a manufacturer of differentiated chemical products and inorganic chemical products. The company operates in four segments: Polyurethanes, Materialsand Effects, Performance Products and Pigments. Its products areused in a range of applications, including those in the adhesives,aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paintsand coatings, power generation, refining, synthetic fiber, textilechemicals and dye industries.

About Hexion Specialty

Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. --http://www.hexionchem.com/-- is a producer of thermosetting resins, or thermosets. Thermosets are a critical ingredient invirtually all paints, coatings, glues and other adhesives producedfor consumer or industrial uses. Hexion Specialty Chemicals iscontrolled by an affiliate of Apollo Management L.P.

Hexion Specialty Chemicals Inc.'s balance sheet at March 31, 2008,showed the company had total assets of $4.2 billion and totalliabilities of $5.5 billion, resulting in a shareholders' deficitof $1.3 billion.

IDLEAIRE TECHNOLOGIES: $26 Mil. Sale to Noteholder Group Approved-----------------------------------------------------------------The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware approved the sale of IdleAire Technologies Corp. to noteholder group IdleAire Acquisition Company LLC for about $26 million, Jamie Mason writes for The Deal. Sale objections were settled during a July 11, 2008 hearing, The Deal notes.

The Deal relates that during a July 9, 2008 auction, the sole competing bidder, Zohar Motorcycles Inc., lost to the noteholder group as designated stalking horse bidder. Zohar Motorcycles is an affiliate of Patriarch Partners LLC, The Deal says.

The Troubled Company Reporter said on June 2, 2008, that the Debtor agreed to sell its assets for $10 million, includingassumption of certain liabilities to the noteholder group. The group's $10 million offer was subsequently raised to $17.5 million, plus assumption of debts, The Deal states.

Knoxville, Tennessee-based IdleAire Technologies Corp. --http://www.idleaire.com/-- is a privately held corporation founded in June 2000 and has not been profitable since inception. It manufactures and services an advanced travel center electrification system providing heating, ventilation & air conditioning, Internet and other services to truck drivers parked at rest stops. The company delivers its services to long-haul drivers through its patented Advanced Travel Center Electrification(R) system, or ATE system, comprised of an in-cab service module connected to an external heating, ventilation and air conditioning unit, or HVAC unit, mounted on a truss structure above parking spaces. IdleAire has 131 locations in 34 states and employs about 1,200 people.

The company filed chapter 11 petition on May 12, 2008 (Bankr. D.Del. Case No. 08-10960). Judge Kevin Gross presides over thecase. Elihu Ezekiel Allinson, III, Esq., William A. Hazeltine,Esq., and William David Sullivan, Esq., at Sullivan HazeltineAllinson, LLC represent the Debtor in its restructuring efforts. John Monaghan, Esq., at Holland & Knight LLP is co-counsel to the Debtor. The Debtor selected Kurtzman Carson Consultants LLC as claim, noticing and balloting agent. The U.S. Trustee for Region 3 appointed three creditors as members of the Official Committee of Unsecured Creditors. Saul Ewing LLP represents the Creditors' Committee.

As reported in the Troubled Company Reporter on June 30, 2008, theDebtor's summary of schedules showed total assets of $152,398,370and total debts of $373,220,369.

The loss was tied to Alesco's investment in collateralized debtobligations issued by IndyMac, the report added.

IndyMac's banking unit, IndyMac Bank FSB, was seized by the Office of Thrift Supervision on July 11.

Shares of Alesco fell 19 cents, or 13.6%, to $1.19 in morning trading on Tuesday, AP stated. According to AP, earlier in the session, shares hit an all-time low of $1.08.

Alesco shares sold for $1.14 as of the close of trading at the New York Stock Exchange on July 16. The company's shares closed at $1.38 the previous day.

In a press statement, Alesco Financial provided an update on its trust preferred securities portfolio, including the expected impact to AFN of the seizure of IndyMac Bancorp.

In June 2008, IndyMac elected to defer its interest payments on $125 million aggregate principal amount of trust preferred securities held in eight collateralized debt obligation, or CDO, transactions in which AFN is an equity investor.

The IndyMac deferral triggered the over-collateralization tests in five of these eight CDOs. The trigger of an over-collateralization test in a CDO means that AFN, as a holder of equity securities, will no longer receive current distributions of cash in respect of its equity interests until sufficient cash flow is paid to senior debt holders in the CDOs to cure the over-collateralization tests.

Subsequent to the IndyMac deferral, four additional banks elected to defer interest payments on their trust preferred securities, which has resulted in the over-collateralization tests being triggered in two additional CDOs in which Alesco holds equity interests. One of the CDO over-collateralization failures has since been cured, bringing the total number of AFN's CDOs in over-collateralization to six as of June 30, 2008.

AFN expects three of the six affected CDOs to cure theover-collateralization failures and recommence making equitydistributions within 3 to 6 quarters and the other three to do so within 20 to 35 quarters.

These cashflow projections assume zero recovery of principal or interest on any of the currently deferring or defaulted securities and no additional deferrals.

For the year ended Dec. 31, 2007, and the quarter ended March 31, 2008, the six affected CDOs contributed $36.2 million, or 43%, and $8.4 million, or 41%, of AFN's adjusted earnings for such periods.

The aggregate principal amount of trust preferred securities in deferral as of June 30, 2008, is $282.3 million, representing approximately 5.5% of AFN's consolidated trust preferred securities portfolio and an aggregate of $4.5 million in quarterly interest payments to the eight CDOs in which AFN invests, of which AFN's proportionate share is approximately $3.1 million, or about $0.05 per diluted AFN common share per quarter.

AFN anticipates that the seizure of IndyMac will cause AFN to record a realized tax loss of approximately $86 million, which is equal to AFN's proportionate share of the $125 million of IndyMac securities held by the eight CDOs.

The realized tax loss is expected to significantly offset AFN's expected taxable income for the year ending Dec. 31, 2008, including the non-cash income relating to the CDOs that are failing overcollateralization tests as of June 30, 2008.

AFN is evaluating its overall portfolio for changes in fair value in connection with the preparation of its second quarter financial results, which AFN expects to announce on Aug. 5, 2008.

As of June 30, 2008, AFN has available unrestricted cash ofapproximately $120 million. During June 2008, AFN sold a subsidiary that owned approximately $87.5 million notional of credit default swap positions for $70.4 million in cash. As a result of this sale transaction, the $69.3 million of counterparty margin included in AFN's March 31, 2008, unrestricted cash balance is no longer subject to counterparty or market risk.

"The failure of IndyMac is indicative of the stress that the banking sector is under at the time and is likely to be under for the foreseeable future," James McEntee, president and CEO of AFN, said.

"IndyMac's failure has significantly impacted our portfolio; however, as a result of our strong liquidity position, we continue to believe we have the ability to be patient and to manage through these difficult times."

About Alesco Financial

Headquartered in Philadelphia, Alesco Financial Inc. (NYSE: AFN)-- http://www.alescofinancial.com/-- is a specialty finance real estate investment trust (REIT). The company is externally managedby Cohen & Company Management LLC, a subsidiary of Cohen BrothersLLC (which does business as Cohen & Company), an alternativeinvestment management firm, which, since 2001, has providedfinancing to small and mid-sized companies in financial services,real estate and other sectors.

About Indymac Bancorp

Headquartered in Pasadena, California, IndyMac Bancorp Inc.(NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank thatoriginates mortgages in all 50 states of the United States. Indymac Bank provides financing for the acquisition, development,and improvement of single-family homes. Indymac also providesfinancing secured by single-family homes and other bankingproducts to facilitate consumers' personal financial goals. IndyMac specialized in making and selling so-called Alt-A mortgageloans, a category of loans to consumers more credit worthy thansubprime borrowers but typically without the completedocumentation of income or assets necessary to receive a prime-rate loan. The company facilitates the acquisition, development,and improvement of single-family homes through the electronicmortgage information and transaction system platform thatautomates underwriting, risk-based pricing and rate locking viathe internet at the point of sale. Indymac Bank offers mortgageproducts and services that are tailored to meet the needs of bothconsumers and mortgage professionals. Indymac operates throughtwo segments -- mortgage banking and thrift.

The company was ranked the ninth-largest U.S. mortgage lender in2007 in terms of loan volume, The Wall Street Journal says, citingtrade publication Inside Mortgage Finance.

* * *

As reported by the Troubled Company Reporter on July 11, 2008,Standard & Poor's Ratings Services lowered its rating on IndymacBancorp and its subsidiaries, including lowering the counterpartycredit rating on Indymac, to 'CCC/C' from 'B/C'. "We took thisaction because we believe that Indymac's weakened financialprofile and exposure to deteriorating housing markets leaves itscreditworthiness severely impaired," said Standard & Poor's creditanalyst Robert B. Hoban, Jr.

On July 9, the TCR said Fitch Ratings downgraded the long-termIssuer Default Ratings of Indymac Bancorp to 'CC' from 'B-'; andthe long-term Issuer Default Ratings of Indymac Bank FSB to 'CCC'from 'B'. The downgrade follows IMB's disclosure that, accordingto its regulators, the bank is no longer 'well capitalized'. Concurrent with this rating action, Fitch has removed all ratingsfrom Rating Watch Negative. The Rating Outlook is Negative forIMB.

At the same time, Moody's also affirmed Intelsat's Caa1 corporate family rating, Caa1 probability of default rate and SGL-3 speculative grade liquidity rating while maintaining the stable ratings outlook.

The rating action was prompted by refinance activity resulting from required change of control offers applicable to debt instruments that were outstanding prior to Intelsat's recent acquisition by private equity investors.

This third and final step in a multi-stage transaction, with steps one and two having been the subject of Moody's June 24, 2008, and July 1, 2008, press releases, in the names of Intelsat (Bermuda), Ltd., and Intelsat Jackson Holdings, Ltd., respectively.

As was the case in the initial two steps, since this transaction substitutes debt being "put" back to Intelsat Corporation with similarly sized and structured replacements (albeit with minor modifications to coupons that increase by 25 basis points in each instance), the transaction is assessed as being neutral to Intelsat's Caa1 CFR, Caa1 PDR and SGL-3 speculative grade rating, with no consequent modification to existing ratings or loss given default assessments of individual debt instruments.

Applicable ratings on debt instruments being completely refinanced will be withdrawn in due course. With no change to the credit profile of the company expected to occur over the near term, the outlook continues to be stable.

Headquartered in Pembroke, Bermuda, Intelsat Ltd. is the world's leading fixed satellite service operator and is privately held by BC Partners Holdings Limited, Silver Lake Partners and certain other equity investors.

INTELSAT CORP: S&P Puts 'BB-' Rating on $658MM 9.25% Senior Notes-----------------------------------------------------------------Standard & Poor's Ratings Services assigned a 'BB-' issue-rating and a '1' recovery rating to Intelsat, Corp.'s $658 million 9.25% senior notes due 2014 and $581 million 9.25% senior notes due 2016. The '1' recovery rating indicates the expectation for very high (90%-100%) recovery in the event of a payment default. Intelsat Corp. is an indirect subsidiary of Bermuda-based Intelsat, Ltd. The corporate credit rating on parent Intelsat, Ltd. is 'B' and remains unchanged and the outlook is stable. Intelsat is the largest provider of fixed satellite communications services worldwide, supplying voice, data, and video connectivity globally through its fleet of 53 owned satellites.

Proceeds from the new debt will be used to finance the repayment of the issuer's outstanding $658 million 9.25% term loan due 2014 and $581 million 9.25% term loan due 2016 and pay related fees and expenses. The ratings are based on preliminary terms and conditions and are subject to review of final documentation.

The ratings on Intelsat reflect a highly leveraged financial profile that allows for limited financial flexibility in the medium term and overwhelms very attractive business characteristics. A strong business risk profile reflects the company's global scale, strong geographic diversification, and strong revenue backlog that provides for significant cash flow visibility. This fundamentally sound business profile enables the company to support such high levels of leverage at this rating.

The $1.4 million class M remains at 'C/DR5'. Fitch does not rate the $1.5 million class Q. Class A1 has been repaid in full.

The affirmations are a result of stable pool performance and minimal paydown since Fitch's last rating action. As of the June 2008 distribution date, the transaction's aggregate principal balance has been reduced 21% to $584.8 million from $740.1 million at issuance. In total, 48 loans (46.7%) are defeased. There are no delinquent or specially serviced loans.

Fitch has identified 15 loans (4.1%) as Fitch loans of concern due to declining performance. The largest Fitch loan of concern (0.6%) is secured by a 172-room extended stay hotel in Decatur, Georgia. The performance of the property has declined due to weak local economic conditions. Servicer reported debt service coverage ratio was 0.9 times with 88% occupancy rate as of year-end 2007, compared to a DSCR of 1.52x with occupancy rate of 95.4% at issuance.

The second largest Fitch loan of concern (0.5%) is secured by a 194 unit manufactured housing community in Randolph, North Carolina. The performance of the property continues to deteriorate due to declining occupancy. Servicer reported DSCR was 0.79x with 70% occupancy rate as of YE 2007, compared to a DSCR of 1.39x with occupancy rate of 95% at issuance.

There are no loan maturities or anticipated repayment dates in 2008. 43% of the pool is scheduled to mature in 2009, 71.2% of which is already defeased. The remaining 28 non-defeased maturing loans (12.4% of the pool) have a weighted average mortgage coupon of 8.36%. Of the 95 remaining non-defeased loans in the pool, 76 (86.1%) reported YE 2007 financials with a weighted average DSCR of 1.46x.

KB HOME: Elects Robert Johnson to Board of Directors----------------------------------------------------Robert L. Johnson was unanimously elected as KB Home board of director, bringing the total number of directors to 11.

"[Mr. Johnson] is one of the premier business leaders in America today," said Stephen Bollenbach, chairman of the board of KB Home. "One of the true measures of a leader is someone who not only has answers but who asks the right questions and always looks for ways to improve and innovate. Having had the privilege of serving with him on the board of directors for Hilton Hotels, I know firsthand the caliber of thinking he brings to the table."

"[Mr. Johnson] has an incredible and unique depth of experience in real estate, finance and brand-building that will be invaluable as KB Home moves forward from the current housing market," said Jeffrey Mezger, president and chief executive officer of KB Home. "His fresh perspective and visionary ideas will help to guide us as we build on our 50-year history to create the future of KB Home."

Mr. Johnson is founder and chairman of The RLJ Companies, a business network that owns or holds interests in a diverse portfolio of companies in the financial services, real estate, hospitality/restaurant, professional sports, film production, gaming and recording industries.

Mr. Johnson is also the majority owner of the Charlotte Bobcats, the National Basketball Association's franchise located in Charlotte, North Carolina.

Prior to forming The RLJ Companies, Mr. Johnson was founder and chief executive officer of Black Entertainment Television, the first African American-owned company publicly traded on the New York Stock Exchange, which was acquired by Viacom Inc. in 2001. Mr. Johnson continued to serve as chief executive officer of BET until 2006. Before founding BET in 1979, Mr. Johnson served as vice president of government relations for the National Cable & Telecommunications Association, a trade association representing more than 1,500 cable television companies.

Mr. Johnson serves on the Lowe's Companies, Inc. board of directors, the IMG Worldwide, Inc. board of directors, the Strayer Education, Inc. board of directors, the NBA Board of Governors, The Johns Hopkins University board of trustees, the Deutsche Bank Advisory Committee, the Wal-Mart Diversity Committee, and The Business Council. He previously served on the board of directors for US Airways, Hilton Hotels Corporation, General Mills, United Negro College Fund, and the National Cable Television Association, and on the board of trustees for the American Film Institute.Mr. Johnson is a graduate of the University of Illinois and holds a master's degree from the Woodrow Wilson School of Public and International Affairs at Princeton University.

About KB Home

Based in Los Angeles, California, KB Home (NYSE: KBH) --http://www.kbhome.com/-- is one of the largest homebuilders in the United States. The company has operating divisions in 13states.

At May 31, 2008, the company's consolidated balance sheet showed $4.8 billion in total assets, $3.5 billion in total liabilities, and $1.3 million in total stockholders' equity.

For the six-months ended May 31, 2008, the company reported a consolidated net loss of $524.1 million on total revenues of $1.4 billion, compared with a net loss of $121.1 million on total revenues of $2.8 billion in the comparable six-month period ended May 31, 2007.

* * *

The Troubled Company Reporter said on May 21, 2008, that Standard& Poor's Ratings Services lowered its corporate credit and seniornote ratings on KB Home to 'BB' from 'BB+'. S&P also lowered itsrating on the company's senior subordinated notes to 'B+' from'BB-'. The outlook remains negative. The rating actions affect$2.15 billion of rated notes.

The TCR on June 11, 2008, said that Moody's Investors Servicelowered all of the ratings of KB Home, including its corporatefamily rating to Ba2 from Ba1, the ratings on its various issuesof senior unsecured notes to Ba2 from Ba1, and the rating on itssubordinated notes to B1 from Ba2. At the same time, aspeculative grade liquidity rating of SGL-2 was assigned. Theoutlook remains negative.

"At the same time, we assigned issue-level ratings to L-1's senior secured financing and senior convertible notes. We assigned the issue-level rating on the company's $350 million senior secured bank facility at 'BB+', with a '1' recovery rating, indicating that lenders can expect very high (90%-100%) recovery in the event of a payment default," said Standard & Poor's credit analyst David Tsui. The secured financing consists of a $100 million revolving credit facility and a $250 million term loan A, both due 2013.

S&P also assigned the issue-level rating on the company's $175 million senior convertible notes due 2027 at 'BB-', with a '4' recovery rating, indicating that lenders can expect average (30%-50%) recovery in the event of a payment default. All ratings are based on preliminary offering statements and are subject to review upon final documentation.

Proceeds from the $250 million first-lien term loan and $49 million drawn from the $100 million revolving credit facility, along with $120 million of common stock issuance will be used to fund the purchase of unrated Digimarc Corporation, also a supplier of secure identity solutions.

L-1 is a provider of identity solutions and services that enable governments, law enforcement agencies and businesses to enhance security, reduce identity theft and protect personal privacy. The company has transformed itself in the past few years from a niche vendor into a leading consolidator in the identity and biometric area via a number of acquisitions. It now has a more diverse suite of products and services targeting global markets including government entities and commercial customers.

The ratings reflect the company's short operating history at its current level, dependence on government spending, a highly acquisitive growth strategy, and high leverage, partly offset by L-1's leading position in a high growth niche market, a portfolio of biometrics products and services, and revenue visibility from long-term contracts.

At the same time, S&P assigned a 'B+' bank loan rating and a recovery rating of '2' to LabelCorp Holdings' and York Label Canada Ltd.'s proposed $190 million senior secured credit facilities, based on preliminary terms and conditions. The ratings indicate that lenders can expect substantial recovery (70% to 90%) in the event of a payment default. Transaction proceeds will be used to finance the acquisition of LabelCorp Holdings Inc. by Diamond Castle Holdings LLC, repay existing debt, and for related fees and expenses.

Pro forma for the transaction, Omaha-based LabelCorp Holdings is expected to have total debt outstanding of about $273 million at closing.

On June 12, 2008, LabelCorp Holdings entered into a definitive agreement to be acquired by Diamond Castle Holdings. If completed as proposed, the financing plan will include $165 million senior secured term loans, $25 million revolving credit facilities, $47.8 million in senior subordinated notes, and $47.8 million in junior subordinated debt. The equity contribution will consist of 10% of common equity and 90% of perpetual payment-in-kind preferred equity. The company expects to close the transaction on approximately Aug. 1, 2008, subject to customary closing conditions.

"The ratings reflect LabelCorp's vulnerable business risk profile, incorporating its relatively narrow scope of operations in the highly fragmented North American prime labels segment of the packaging industry and moderate customer concentration," said Standard & Poor's credit analyst Henry Fukuchi. "The company also has risks associated with an acquisitive growth strategy, low geographic diversification, and a highly leveraged financial profile. These negatives are partially offset by leading market positions in the pressure sensitive prime label segment of the label market and long-standing relationships with brand name key customers."

With pro forma annual revenues of about $252 million, LabelCorp is a leading manufacturer of pressure sensitive prime labels for the consumer products, wine and spirits, food and beverage, and pharmaceutical end markets.

LANDSOURCE COMMUNITIES: Court Denies Proposed $1.1 B DIP Financing------------------------------------------------------------------The U.S. Bankruptcy Court for the District of Delaware has denied LandSource Communities Development LLC's proposed $1,185,000,000 debtor-in-financing from Barclays Bank, PLC, and a syndicate of lenders who previously loaned the Debtors over $1,000,000,000 before the Petition Date.

According to Bloomberg News, the Hon. Kevin J. Carey held an eight-hour hearing and eventually ruled that he wouldn't allow the DIP Loan, which had provided for a roll-up of the Debtors $1,050,000,000 of prepetition debt owed to the First Lien Lenders.

Judge Carey, according to the same report, gave lenders and the Official Committee of Unsecured Creditors until July 18 to come up with an alternative financing arrangement.

The Second Lien Lenders and the Creditors Committee vigorously objected to many terms of the DIP Loan package. The Debtors and the First Lien Lenders responded that the contentions contained mischaracterizations and baseless allegations. Nevertheless, the Court gave the objectors an opportunity to come up with a beter proposal.

On behalf of the Official Committee of Unsecured Creditors, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California, tells the Court the $1,185,000,000 debtor-in-possession financing sought by LandSource and its affiliates should not be approved because:

(a) the Debtors' existing First Lien Lenders and the essentially identical syndicate of lenders providing the DIP Financing are the primary beneficiaries of the loan package, which provides for a roll-up of up to $1,050,000,000 in prepetition first lien debt; and

(b) the Lenders nonetheless demand a dizzying package of benefits for the First Lien Lenders as purported "adequate protection" for the alleged "injury" to their interests resulting from the DIP Financing.

"By way of background, this is a liquidating real estate case," Ms. Jones says. She notes the Debtors have no resources to acquire new real estate -- the Debtors are simply in the process of readying for sale the real estate they currently own. The package, she avers, is designed to (a) give the First Lien Lenders a dominating position over the Committee concerning the inevitable liquidation to follow and (b) insure that the First Lien Lenders receive the entire recovery from the unencumbered assets that currently exist. While valuation work is just commencing, the value of of the unencumbered assets grabbed by the First Lien Lenders could easily exceed $100,000,000, she asserts.

The Committee believes the DIP Financing is being used simply to recycle cash to the Lenders at exorbitant pricing to the prejudice of all other creditor constituencies. A court should only approve DIP financing, if the debtor actually needs the financing for some purpose other than enhancing the secured creditors' position in the bankruptcy case, Ms. Jones asserts. This consideration, she contends, is fundamental in the Debtors' Chapter 11 cases because the size of the DIP Financing is largely illusory, and the cost of any DIP Financing actually required is simply staggering.

The DIP Facility is comprised of (i) a revolving credit facility of $135,000,000 including an L/C subfacility of up to $35,000,000 and swingline facility of up to $10,000,000, and (ii) a junior secured term loan, comprising of a roll-up of up to $1,050,000,000 of prepetition debt to the First Lien Lenders.This $135,000,000 is itself, however, is something of a fiction, as the Debtors are required to sell an extensive amount of real estate collateral -- whose value will exceed the $135,000,000 DIP Facility -- during the same period. She also notes the part of postpetition revolving credit facility will be used to replace $30,000,000 in letters of credit issued prepetition.

-- the First Lien Lenders are entitled to receive more than double the interest rate spread on the rolled-up $1,000,000,000 prepetition term loan than they were receiving prepetition;

-- there are two commitment fees and a fee of 6% of all L/Cs outstanding as of the Petition Date;

-- there are prepayment premiums payable on money not even borrowed; and

-- there are additional undisclosed commitment fees set forth in a confidential Fee Letter.

Moreover, Ms. Jones asserts that the Roll-Up cannot be approved, citing that roll-ups are antithetical to fundamental bankruptcy principles. She claims that the proposed roll-up is "simply an attempted asset/ leverage grab" by the Lenders, Ms. Jones asserts. "The Debtors' contention that rolling $1 billion in prepetition debt into an administrative claim is necessary as 'adequate protection' for the First Lien Lenders under these circumstances is absurd on its face."

The Roll-Up has only one purpose which has nothing to do with any traditional justification for "adequate protection" -- to prejudice the interests of junior creditors, Ms Jones avers.She notes the DIP Facility fails to satisfy all four prongs set in In re Vanguard Diversified, Inc., 31 B.R. 364,366 (Bankr. E.D.N.Y. 1983): (1) that the debtor' business operations would fail absent the proposed financing, (2) that it is unable to obtain alternative financing on acceptable terms, (3) that the proposed lender will not accept less preferential terms, and (4) that the proposed financing is in the general creditor body's best interest. She points out:

(i) Virtually the entirety of the DIP Financing is to directly enhance the value of the First Lien Lenders' Real Estate collateral for sale or simply refinance the prepetition L/Cs

(ii) The Second Lien Lenders initially vehemently opposed the Roll-Up, silenced only by threats of litigation because their opposition allegedly violates the terms of their Intercreditor Agreement.

(iii) The only beneficiaries of the Roll-Up are the First Lien Lenders.

Ms. Jones also points out the DIP Financing Motion is unclear with respect to:

-- whether the Lenders are seeking to prime existing mechanic's liens; and

-- with respect to the treatment to be afforded to the claims of subcontractors and vendors arising from postpetition services provided to the Debtors.

The Creditors Committee opposes to any proposal that would prime the mechanic's liens. The Committee asserts mechanic's liens in existence as of the Petition Date should be preserved, subject to any challenge with respect to the mechanic's liens perfection and avoidability.

The Committee filed, together with its objection to the DIP Financing, the transcript of its deposition of Donald L. Kimball, senior vice president and chief financial officer of The Newhall Land and Farming. The Committee obtained the Court's approval to file the document under seal because it is subject to a confidentiality agreement.

2nd Lien Agent Demands Adequate Protection

The Bank of New York Mellon, administrative agent under the $244,000,000 Prepetition Second Lien Agreement, points out

-- the Second Lien Lenders still have not received from the Debtors any go-forward adequate protection package, which should provided as a matter of law if the Chapter 11 cases are to continue; and

-- The DIP Loan package provides overwhelming control to the First Lien/DIP Lenders over every aspect of the Chapter 11 cases and near tripling of the interest rate margin on the $1,050,000,000 of debt proposed to be "rolled-up" over the current contract interest rate on the debt.

Counsel to BNY Mellon, Andrew N. Rosenberg, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, says the overwhelming control given to the First Lien Lenders and DIP lenders -- over the composition of management, budget, asset sales, contracts -- leaves the Debtors with few alternatives for restructuring. If overwhelming control is granted to those parties, it is unlikely that the Debtors can conduct their Chapter 11 cases in accordance with their fiduciary duties to all creditors and pursue a consensual plan process that will maximize distributions to constituents, Mr. Rosenberg asserts.

BNY Mellon asks the Court to include grant a limited adequate protection package to the Second Lien Lenders:

(a) superpriority claim pursuant to Section 507(b) of the Bankruptcy Code, to the extent of diminution in collateral value during the Chapter 11 cases, junior to the superpriority claims of the First Lien Agent and the DIP Lenders;

(b) junior replacement liens on all collateral currently included in the Second Lien Lenders' Collateral package;

(c) execution by the Debtors of a customary engagement letter for financial advisors to the Second Lien Agent plus a success fee payable solely from any recovery to the Second Lien Lenders;

(d) current payment of reasonable fees and expenses of Delaware and New York counsel retained by the Second Lien Agent, as well as an expert retained to appraise the Collateral, after submission of an invoice to the Debtors, with copies to the United States Trustee, the DIP Agent and the Committee;

(e) current payment of administration fees to the Second Lien Agent in respect of the Second Lien Credit Agreement;

(f) copies of all reports and other materials delivered by the Debtors to the DIP Agent and other reports, information and materials as reasonably requested by the Second Lien Agent from time to time; and

(g) reasonable access for the Second Lien Agent's counsel, financial advisors and expert consultants to the collateral, officers of the Debtors and financial advisors to the Debtors, in each case to the same extent the access is provided to the DIP Agent.

Mechanic's Lien Holders, Others Oppose Priming

Holders of mechanic's liens West Park Landscape Inc., Altfillisch Contractors, Inc., Oberg Contracting Corp., Oakridge Landscape Inc., John Burgeson Contractors Inc., Southern Sun Constructions Company, Icon Constructors, Inc., Pacific Advanced Civil Engineering, Hunsaker & Associates, Psomas & Associates,and Independent Construction Company do not consent to the priming of their "valid" liens. Amtech Elevator Services says that there is no legal basis to afford the DIP Lenders a priming lien. Poe asserts that the Debtors did not, and will unlikely be able to, demonstrate how they will provide adequate protection in exchange for the priming of the liens because there is no other property of the Debtors' estates with sufficient equity available to adequately protect its lien rights.

PCL Construction Services, Inc., also asks the Court to provide it with adequate protection for its inchoate liens in the property owned by the Debtor LNR-Lennar Washington Square, LLC.

The Los Angeles County Tax Collector and Los Angeles County Tax Assessor, a secured creditor with valid tax liens, argues that its Liens should also be treated as permitted liens and should not be capped. Miami-Dade County Tax Collector filed, but later withdrew, its objection. Miami-Dade said that they it has resolved with the Debtors as to a dispute with respect to payment of prepetition ad valorem taxes.

Lennar Supports Liens Holders

Lennar Homes of California, one of the equity owners of LandSource, agrees that the proposed treatment of mechanic's liens is unclear and concurs that it would be inappropriate for the proposed DIP Financing to prime valid mechanic's liens recognized under applicable state law and Section 546(b) of the Bankruptcy Code.

David B. Stratton, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, avers mechanic's liens cannot be primed unless the creditors are provided adequate protection, which would be a particularly difficult showing since the roll up purports to subordinate them to approximately $1,000,000,000 of secured debt.

Lennar cedes that even a meticulous review of the DIP Financing Motion would not warn one that mechanic's liens might be primed.Lennar, thus, avers any ruling by the Court should contain language appropriately preserving the rights of any valid mechanic's lien creditors.

Lennar says is not purporting to speak on behalf of the Debtors. Rather, it speaks in its own stead in order to comment, briefly, on one particular aspect of the proposed DIP Financing.

LandSource Says DIP Loan to Enable Restructuring

LandSource explains that it decision to enter into the DIP Agreement was borne of necessity and is a rational, commercially reasonable choice to maximize the value of its assets. It saysit thoroughly tested the credit markets and aggressively pursued all possible avenues of liquidity. The unwillingness of any potential lender to extend credit other than on a secured, priming basis left the Debtors with few options, asserts Mark D. Collins, Esq., at Richards, Layton & Finger, PA, in Wilmington, Delaware.

According to Mr. Collins, contrary to the assertions in the Creditors Committee and the Second Lien Lenders, the Debtors made the reasonable business decision that "bet the company" litigation on the first day of their cases was unwarranted by the minimal advantages of the proposals received from potential third-party lenders.

According to Mr. Collins, the "blunderbuss" objections of the Committee and Second Lien Agent focus on the perceived shortcomings of the DIP Agreement, many of which were the very same terms that the Debtors would have had to accept if they had selected one of the other two proposals tendered and engaged in a priming war. Other purported shortcomings do not exist; instead they have been created by the Committee's misunderstanding of the terms of the DIP Agreement, he asserts.

The new financing will facilitate the Debtors' reorganization and enable them to avoid the immediate liquidation of their assets, Mr. Collins asserts. The Debtors have exercised their judgment in good faith and on an informed basis, and the Objections offer no evidence to the contrary. Mr. Collins points out that absent constructive input from the Committee, the Debtors have little ability to obtain the types of modifications to the DIP Agreement that might resolve potential objections.

The Committee, Mr. Collins adds, misconstrues the Chief Restructuring Officer provisions of the DIP Agreement. Although the Debtors are required to file an application to retain a CRO acceptable to the Postpetition Lenders, the ultimate decision maker with respect to all aspects of the CRO's retention is the Court, he points out.

Mr. Collins also says the First Lien Lenders are entitled to adequate protection to the extent there is a diminution in the value of their interest in their prepetition collateral. The adequate protection has been provided to protect against a diminution of the $1,000,000,000 secured interest of the First Lien Prepetition Lenders during the Chapter 11 cases as well as from the priming liens supporting the $135,000,000 Revolving Credit Facility.

In response to the individual creditor objections, the Debtors and the DIP Lenders have included in the proposed Final Order a provision that "Permitted Liens," as defined in the DIP Credit Agreement, will include any valid, enforceable, perfected and non-avoidable Liens that were the subject of the Individual Creditor Objections. The Debtors believe that the added provision resolves each of the Individual Creditor Objections.

The Debtors reached out to certain of the objecting parties -- including the Committee -- but heard nothing until after the Objections were filed with the Court. The Debtors continue to hope for a consensual resolution of the Committee's objections. The Debtors are ready to demonstrate to the Committee that the DIP Agreement was the best possible result of intense, difficult negotiations during the period leading up to the commencement of the Chapter 11 cases and that the decision to enter into the DIPAgreement was a prudent and reasonable exercise of the Debtors' business judgment in light of all the facts and circumstances.

Barclays Bank, PLC, administrative agent under the Prepetition First Lien Credit Agreement and the DIP Credit Agreement, says the DIP Financing is the only viable means by which the Debtors can continue to fund their operations, preserve the going concern value of their assets, and have an opportunity to propose a feasible Chapter 11 plan.

Edwin J. Harron, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, says that absent the DIP Loan, the Debtors will be unable to continue their business and their assets will be liquidated. Barclays warns that, if this happens, it won't consent to any further use of its collateral and will immediately seek to enforce its rights under the DIP Credit Agreement and the First Lien Credit Agreement.

Like the Debtors, Barclays assert that the Committee and the Second Lien Lenders have engaged in untrue and inaccurate statements and characterizations of the DIP Financing.

Mr. Harron avers the Committee's assertions -- among others, that the creditor body would be better off liquidating the Debtors' assets immediately -- rests upon the dubious assumption that unidentified allegedly unencumbered assets would have a value sufficient to provide a recovery to unsecured creditors. "This is the height of recklessness for those who are purporting to act as fiduciaries for unsecured creditors". The Committee's argument that roll-ups are "antithetical to fundamental bankruptcy principles" is contrary to numerous cases where courts in District have approved roll-ups, Mr. Harron further points out.

Barclays asserts the DIP Agreement should be approved in all respects.

First Lien Agent Seeks To Strike BoNY Mellon's Objection

Barclays Bank ask the Court to strike BNY Mellon's objections as it constituted a breach under their Intercreditor Agreement.

Edwin J. Harron, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, explains the terms of the Intercreditor Agreement prohibit the Second Lien Lenders from challenging any DIP Financing supported by the First Lien Lenders, including by filing and pursuing the Second Lien Objections.

Mr. Harrons asserts that BNY's violations have caused, and continue to cause, substantial harm to the First Lien Lenders. In order to mitigate, and to avoid exacerbating, this harm, and in order for the Court to avoid rewarding the Second Lien Agent's willful violation of its contractual obligations, Barclays asserts the Court should strike the Objection.

On behalf of BNY Mellon, Andrew N. Rosenberg, Esq., counters that BoNY Mellon has the right to object to certain portions of the Debtors' DIP Financing Motion. He notes the Intercreditor Agreement expressly authorizes BoNY Mellon and the Second Lien Lenders to object to "any ancillary agreements or arrangements regarding Cash Collateral use or the DIP Financing that are materially prejudicial to their interest."

Mr. Rosenberg says Barclays is seeking to eviscerate that provision from the Intercreditor Agreement by labeling every ancillary non-financial point a "key deal point" and then concluding that they are one and the same. Mr. Rosenberg asserts that if this definition is accepted, and the ancillary is defined to simply mean important to Barclays, then every onerous point that Barclays would by definition not be ancillary. According to Mr. Rosenberg, ancillary means as not directly related to the extension of credit, not immaterial or unimportant.

BoNY Mellon, thus, asserts it has contained to its objection to that which is proscribed by the Intercreditor Agreement.

About LandSource Communities

LandSource Communities Development LLC, which operates in Arizona,California, Florida, New Jersey, Nevada and Texas, is involved inthe planning and development of master planned communities andtransforming undeveloped land into ready-to-build home sites andcommercial properties. With the exception of one developmentproject in Marina del Rey, California, LandSource does not buildhomes or commercial properties.

LandSource and 20 of its affiliates filed for chapter 11bankruptcy protection before the U.S. Bankruptcy Court for theDistrict of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at WeilGotshal & Manges in New York, and Mark D. Collins, Esq., atRichards Layton & Finger in Wilmington, Delaware. Lazard Freres &Co. acts as the Debtors' financial advisors, and Kurtzmann CarsonConsultants serves as the Debtors' notice and claims agent.

According to the Troubled Company Reporter on May 22, 2008,LandSource sought help from its lender consortium to restructure$1.24 billion of its debt. LandSource engaged a 100-bank lendergroup led by Barclays Capital Inc., which syndicates LandSource'sdebt. LandSource had received a default notice on that debt fromthe lender group after it was not able to timely meet its paymentsduring mid-April. However, LandSource failed to reach anagreement with its lenders on a plan to modify and restructure itsdebt, forcing it to seek protection from creditors.

LINENS N THINGS: Court Approves $2.6MM Severance Plan Continuation------------------------------------------------------------------The United States Bankruptcy Court for the District of Delaware authorized Linens 'N Things and its debtor-affiliates to implement the Severance Plan for non-insider employees at, and supporting up to 100 additional stores, in addition to the Closing Stores, that may become subject to store closing sales, up to a maximum of $2,500,000 of severance plan payments without prejudice to the Debtors' rights to seek further authority. The Court noted that the order is based on the record of the hearing, and the testimony of Michael F. Gries, the Debtors' interim chief executive officer and chief restructuring officer.

The Court convened a hearing on June 19, 2008, at 12:00 p.m. to consider the Debtors' request.

Prior to the ruling, Roberta A. DeAngelis, acting United States Trustee for Region 3, said that the Debtors provided a vague outline of the terms of the proposed severance plan. She asserted that the Debtors failed to attach a copy of the Severance Plan to their request, and to include:

-- any information regarding the identity of the specific individuals covered under the Severance Plan;

-- the identity of individuals, who in the future may be covered under the plan;

-- the participants' respective salaries, or length-of-service with the company;

-- whether the individuals are covered under any other bonus programs; and

-- other specific information, which would allow parties-in- interest to properly evaluate the Severance Plan.

Aside from its insufficient information, Ms. DeAngelis said she objected to proposal because the Debtors failed to accord proper meaning to the new limitations imposed by Section 503(c)(3) of the Bankruptcy Code. She added that the Debtors fail to acknowledge controlling Third Circuit law, which prohibited or limited them from paying their employees severance as an administrative expense based upon a length-of-service calculation, where the work -- which formed the basis of the payments --occurred prepetition.

The Court reminded the Debtors that no payments will be made, pursuant to the Severance Plan, to any of their employees above the level of district manager absent further Court order.

An employee will not be considered "terminated," and will not be entitled to receive a severance payment in the event that (i) the Debtors' Chapter 11 case is converted to a Chapter 7 case, and (ii) substantially all of the Debtors' assets are sold and the employee is not employed by the purchaser in position earning compensation equal to at least 90% of that employee's compensation immediately prior to the sale.

The Court further ruled that any payments made to any employee on account of the Severance Plan will be reduced dollar-for-dollar by any "store line" bonus payments, including "shrinkage" related bonus payments beginning on June 19, 2008, and going forward, made to the employee pursuant to the Court's final order allowing the Debtors to pay Store Line Bonuses.

Linens 'N Things has secured a $700 million debtor-in-possessionfinancing from General Electric Capital Corp. The company plansto be out of chapter 11 by the end of the year, on this timetable:

LODGENET INTERACTIVE: To Report Debt Reduction in 2nd Qtr. Results ------------------------------------------------------------------LodgeNet Interactive Corporation, in a statement advising about the release its second quarter financial results on July 29, 2008, said it reduced long-term debt during the second quarter from $630.2 million at March 31, 2008, to $616.6 million at June 30, 2008; and that cash and cash equivalents at June 30, 2008, was approximately $15.5 million. As of June 30, the company's $50 million revolver portion of its Credit Facility was unused.

"While the economy and the travel industry are facing near-term challenges, we remain focused on delivering on our free cash flow target range for 2008," said Scott C. Petersen, LodgeNet president & chief executive officer. "The flexibility of our business model allows us to actively manage our capital investment plan and balance sheet and as a result we reduce long-term debt by more than $13 million during the Second Quarter. We prudently reduced capital investment levels and operating expenses during the second quarter and have taken similar steps for the Third Quarter as we have adjusted our capital investment target down to $15 million. We believe these initiatives will put us in a position to further reduce our long-term debt levels and remain within our debt covenants for the balance of the year."

About LodgeNet Interactive Corp.

Based in Sioux Falls, South Dakota, LodgeNet Interactive Corp.(Nasdaq: LNET) -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs ofhospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel roomsrepresenting 9,900 hotel properties worldwide in addition tohealthcare facilities throughout the United States.

LUMINENT MORTGAGE: Releases Data on Projected Portfolio Cash Flows------------------------------------------------------------------Luminent Mortgage Capital, Inc. disclosed last week that it has updated its principal and interest cash flows on its portfolio of mortgage-backed securities for new prepayment, default and severity assumptions as well as June 2008 distribution data. Principal and interest cash flows on its portfolio of mortgage-backed securities is estimated to be $84.3 million over the next 5 years.

As of July 9, 2008, substantially all of Luminent's portfolio of mortgage-backed securities that do not serve as collateral for non-recourse collateralized debt obligations, is pledged as collateral to the $182.6 million of repurchase agreement financing Luminent had outstanding with an affiliate of Arco Capital Corporation Ltd.

A full-text copy of the Supplemental Financial Information containing information on the company's projected portfolio cash flows is available for free at:

Headquartered in San Francisco, Luminent Mortgage Capital Inc.(OTC: LUMC) -- http://www.luminentcapital.com/-- is a real estate investment trust or REIT, which, together with its subsidiaries,has invested in two core mortgage investment strategies.

Under its Residential Mortgage Credit strategy, the companyinvests in mortgage loans purchased from selected high-qualityproviders within certain established criteria as well assubordinated mortgage-backed securities and other asset-backedsecurities that have credit ratings below AAA.

Under its Spread strategy, the company invests primarily in U.S.agency and other highly-rated single-family, adjustable-rate andhybrid adjustable-rate mortgage-backed securities.

On March 28, 2008, the company disclosed its intention, subject toshareholder approval, to restructure the company from a REIT to apublicly-traded partnership or PTP.

Grant Thornton said Luminent Mortgage has lost $721.0 million forthe year ended Dec. 31, 2007, which included $481.7 million inimpairment losses on mortgage-backed securities. The company alsorecorded $21.3 million in corporate, state and U.S. federal incometaxes due to its inability to meet the threshold for tax benefitrecognition as it related to its qualification as a REIT.

As reported in the Troubled Company Reporter on June 5, 2008,Luminent Mortgage's consolidated balance sheet at March 31, 2008, showed $3.8 billion in total assets, $4.0 billion in total liabilities, and $148,000 in minority interest, resulting in a $223.2 million total stockholders' deficit.

Headquartered in San Francisco, Luminent Mortgage Capital Inc.(OTC: LUMC) -- http://www.luminentcapital.com/-- is a real estate investment trust or REIT, which, together with its subsidiaries,has invested in two core mortgage investment strategies.

Under its Residential Mortgage Credit strategy, the companyinvests in mortgage loans purchased from selected high-qualityproviders within certain established criteria as well assubordinated mortgage-backed securities and other asset-backedsecurities that have credit ratings below AAA.

Under its Spread strategy, the company invests primarily in U.S.agency and other highly-rated single-family, adjustable-rate andhybrid adjustable-rate mortgage-backed securities.

On March 28, 2008, the company disclosed its intention, subject toshareholder approval, to restructure the company from a REIT to apublicly-traded partnership or PTP.

Grant Thornton said Luminent Mortgage has lost $721.0 million forthe year ended Dec. 31, 2007, which included $481.7 million inimpairment losses on mortgage-backed securities. The company alsorecorded $21.3 million in corporate, state and U.S. federal incometaxes due to its inability to meet the threshold for tax benefitrecognition as it related to its qualification as a REIT.

As reported in the Troubled Company Reporter on June 5, 2008,Luminent Mortgage's consolidated balance sheet at March 31, 2008, showed $3.8 billion in total assets, $4.0 billion in total liabilities, and $148,000 in minority interest, resulting in a $223.2 million total stockholders' deficit.

MCDERMOTT INTERNATIONAL: Moody's Hikes Ba3 Corporate Family Rating------------------------------------------------------------------Moody's Investors Service upgraded the corporate family ratings of both McDermott International Inc. and J Ray McDermott, S.A. to Ba2 from Ba3 and upgraded their probability of default ratings to Ba3 from B1.

At the same time, Moody's upgraded the universal shelf rating of McDermott International to B2 from B3 and upgraded the senior unsecured revenue bonds backed by McDermott Inc. to B1 from B2.

Finally, Moody's confirmed the Ba2 senior secured debt rating of J Ray McDermott and the Baa3 senior secured rating of Babcock and Wilcox Power Generation Group, Inc. The outlook for all companies is positive. This concludes the review for upgrade initiated on June 12, 2008.

The upgrade of McDermott International and J Ray McDermott's corporate family ratings with positive outlooks reflects Moody's expectation that end market demand for the companies' respective business segments are likely to remain favorable into the medium term.

Moody's believes McDermott International and J Ray McDermott are likely to produce continued strong operating results and sustain key credit metrics at levels supportive of the outlook direction. Ratings could be moved higher should the companies continue to execute on their strong backlogs and maintain ample amounts of liquidity and conservative balance sheets as they any pursue strategic growth initiatives.

The confirmation of the facility ratings at Babcock and Wilcox and J Ray McDermott considers the increase in size of the revolving credit facilities for borrowing purposes which has occurred at each of these entities within the past year, while junior ranking unfunded pension liabilities have been reduced.

Upgrades:

Issuer: J. Ray McDermott, S.A.

-- Corporate Family Rating, Upgraded to Ba2 from Ba3 -- Probability of Default Rating, Upgraded to Ba3 from B1

Issuer: McDermott International Inc.

-- Corporate Family Rating, Upgraded to Ba2 from Ba3 -- Probability of Default Rating, Upgraded to Ba3 from B1

Moody's assesses the ratings for McDermott International and J Ray McDermott using two separate corporate family ratings given the distinct financing arrangements the company has established for its operating entities. McDermott International's credit profile is assessed based on its consolidated results excluding J Ray McDermott, which is considered stand alone and has its own corporate family rating (Ba2).

Moody's said it would review its two corporate family rating construct should the company alter its financing arrangements in a way that consolidated bank lines at the parent and promoted the fluid availability of financial resources between the various entities.

J Ray McDermott's backlog continues to rise as it benefits from its leading market position and strong demand for offshore oil and gas infrastructure. Moody's expects industry fundamentals are likely to remain solid into the medium term supporting the company's prospects for ongoing revenue growth. As well, J Ray McDermott continues to demonstrate a disciplined bidding process evidenced by its favorable operating margins and improving mix of contracts in its backlog.

The expected growth in operating cash flow supports the ratings upgrade and maintenance of positive rating momentum. J Ray McDermott's good liquidity profile and conservative capital structure provides further ratings support and mitigates the downside risk associated with project execution risks and its concentration of activity in cyclical end markets.

While a portion of J Ray McDermott's growing cash balances and debt capacity may be used to pursue strategic growth initiatives, including acquisition activity, Moody's believes J Ray McDermott has capacity to absorb reasonable amounts of integration and execution risks within context of its current rating and outlook.

McDermott International's corporate family rating principally reflects the operations of Babcock and Wilcox and BWX Technologies Inc., and includes their intermediate holding company, McDermott Inc. Profitability and cash flows have continued to improve following Babcock and Wilcox's emergence from an asbestos-related bankruptcy in early 2006 as periodic restructuring charges and asbestos claims have receded (pro-forma consolidation of Babcock and Wilcox before Feb 2006).

Moody's expects demand for the company's services are likely to remain firm through the near term. Good visibility into this time horizon is provided by the company's strong market position, large installed base of equipment and recurring nature of much of its revenue base as well as current backlog levels.

Moreover, Moody's believes Babcock and Wilcox's growth prospects may strengthen into the medium term driven by demand for new power generation and increased customer environmental spending requirements. The rating remains tempered by the company's relatively small size, geographic concentration, and project execution risk.

Currently strong levels of liquidity and relatively low levels of leverage provide key offsets to these risks. Similar to J Ray McDermott, McDermott International's rating also considers the potential that it may pursue strategic growth initiatives through Babcock and Wilcox and BWXT, although Moody's expects any related expenditures would be undertaken while preserving its liquidity and capital strengths.

Headquartered in Houston, Texas, McDermott International Inc. is an international energy services company that provides engineering, fabrication, installation and facilities management services to energy and power companies and to the U.S. government.

The Troubled Company Reporter said on May 22, 2008, that Mr. Meisner filed a personal chapter 11 bankruptcy on May 21, 2008. Agroup of investors had filed an involuntary chapter 7 petition against Phoenix Diversified after learning the fund manager is insolvent and owes roughly $30,000,000 to more than 200 investors.

The Palm Beach Post relates that some 140 investors are asserting more than $140 million in claims against Phoenix Diversified.

Mr. Meisner said that investors may recover some or even all of their investments if Mr. Bakst would play ball, Palm Beach Post notes. In an e-mail, Mr. Meisner alleged that the case trustee is not handling the case in the best interest of lenders, Palm Beach Post relates. Mr. Meisner added that Mr. Bakst isn't willing to consider "lucrative" offers for the Debtor's special proprietary trading software, the report says.

Mr. Bakst explained that what he received are offers to engage in joint venture with the Debtor and raise funds from new investors, which the case trustee said won't happen, Palm Beach Post notes. Mr. Bakst maintained that he won't allow the Debtor to do business with any investor pointing that Mr. Meisner had refused to provide financial information on the Debtor pursuant to a court order, Palm Beach Post says. Mr. Meisner may be asked to pay fines and serve in prison if he continues to cooperate, the report reveals.

Mr. Meisner's counsel, Scott Hecker, Esq., said that Mr. Bakst's request is going nowhere, according to the report.

Mr. Bakst said that Mr. Meisner must cooperate and has to show where all of the investors money went, Palm Beach Post reports.

Court documents showed that Mr. Meisner received $470,597 in salary in 2006, $1.3 million in 2007, and $260,000 up until Phoenix Diversified filed for bankruptcy, Palm Beach Post notes. Mr. Meisner also owns $1.6 million in real property. His monthly expenses averages $17,380 according to court documents, Palm Beach Post says.

A public sale of Phoenix Diversified's assets is set for July 20, 2008 in West Palm Beach, according to the report.

About Phoenix Diversified Investment

Phoenix Diversified Investment Group is a commodities investmentfirm based in Boca Raton, Florida owned by Michael Meisner. Lewis Freeman, of Lewis B. Freeman & Partners in Miami, is a court-appointed receiver in the case against Phoenix Diversified. The company faced an involuntary chapter 7 petition filed by a group of investors after learning that the company is insolvent. About 200 investors asserted claims of more than $140 million against the Debtor.

About Michael Meisner

Michael A. Meisner in Boca Raton, Florida filed a chapter 11 petition on May 19, 2008 (Bankr. S.D. Fla. Case No. 08-16502). Judge Paul G. Hyman, Jr., presides over the case. Sherri B. Simpson, Esq., at Law Offices of Sherri B. Simpson, P.A., represents the Debtor in his restructuring efforts. He listed estimated assets of $1 million to $10 million and estimated debts of $1 million to $10 million when he filed for bankruptcy.

METROPOLITAN HEALTH: S&P Affirms 'B(Fair)' and 'bb' Ratings-----------------------------------------------------------A.M. Best Co. has affirmed the financial strength rating of B(Fair) and issuer credit rating of "bb" of Metropolitan Health Plan (Minneapolis, MN). The outlook for both ratings is negative.

Concurrently, A.M. Best has withdrawn the ratings and assigned a category NR-4 (company request) to MHP. This is in response to management's request that MHP be removed from A.M. Best's interactive rating process.

The rating affirmations reflect MHP's limited market, low level of capitalization and unfavorable underwriting results. MHP has a limited market; it is licensed only in select counties in Minnesota, with a heavy enrollment concentration in Hennepin County. The capitalization level of MHP is considered low. MHP has reported unfavorable underwriting results for the last four years, which has contributed to its decreased capitalization.

Non-employee members of the Board of the Company will be eligible to receive cash compensation and equity awards as set forth in this Policy. Such compensation and awards will be paid or be made, as applicable, automatically and without further action of the Board, unless such non-employee director declines to receive such compensation or awards by notice to the company. This Policy will remain in effect until it is revised or rescinded by further action of the Board.

2. Cash Compensation

Annual Retainer

Each non-employee director will be eligible to receive an annual retainer of $20,000 for service on the Board. In addition, the Chairman of the Board shall be eligible to receive an annual retainer of $85,000 for service on the Board. The annual retainer shall be paid in quarterly installments within thirty (30) days after the end of each calendar quarter.

Meeting Stipends

Each non-employee director will receive a stipend of $1,500 for each Board meeting attended in person and $1,000 for each committee meeting attended in person. In addition, each non-employee director shall receive such stipends with respect to telephonic Board meetings and committee meetings if such telephonic meetings last approximately two hours or longer. The meeting stipends will be paid on a quarterly basis within thirty (30) days after the end of each calendar quarter.

Expense Reimbursements

The Company shall reimburse non-employee directors for reasonable expenses incurred to attend meetings of the Board or its committees. Any travel expenses shall be reimbursed in accordance with the company's standard travel policy. The travel expenses will be reimbursed within thirty (30) days after receipt by the Company of an invoice together with originals or copies of receipts showing the payment of such expenses.

Limitations for Members of Audit Committee

Members of the Audit Committee may not directly or indirectly receive any compensation from the company other than their directors' compensation in accordance with this Policy.

3. Equity Compensation

Initial Awards

On the effective date of his or her election or appointment to the Board, each non-employee director, other than the Chairman of the Board, automatically will be granted a non-qualified stock option to purchase 35,000 shares of company common stock. On the effective date of his or her election or appointment as Chairman of the Board, the Chairman of the Board automatically will be granted a non-qualified stock option to purchase 70,000 shares of the company's common stock.

Committee Chair Awards

On the date of each annual meeting of the company's stockholders, (i) the Chairman of the Audit Committee automatically shall be granted a non-qualified stock option to purchase 7,500 shares of Company common stock, (ii) the Chairman of the Compensation Committee automatically will be granted a non-qualified stock option to purchase 5,000 shares of Company common stock, and (iii) the Chairman of the Nominating & Corporate Governance Committee automatically will be granted a non-qualified stock option to purchase 2,500 shares of common stock.

Annual Awards

On the date of each annual meeting of the company's stockholders, each non-employee director, other than the Chairman of the Board, automatically will be granted a non-qualified stock option to purchase 15,000 shares of company common stock, and the Chairman of the Board automatically will be granted a non-qualified stock option to purchase 30,000 shares of the company's common stock.

Terms of Stock Option Awards

General Terms

The stock options described in this Policy will be granted under and shall be subject to the terms and provisions of the company's Amended and Restated 2003 Equity Incentive Award Plan, as amended from time to time, and shall be granted subject to the execution and delivery of award agreements, including attached exhibits, in substantially the same forms approved by the Board, setting forth the vesting schedule applicable to such awards and such other terms as may be required by the 2003 Plan.

Exercise Price

The exercise price of each option granted to a non-employee director will be the closing price of a share of common stock of the company on the date of grant (or if the stock market was closed on the date of grant, on the last trading day preceding the date of grant).

Vesting of Initial Awards

Options granted as Initial Awards to non-employee directors will become vested in equal installments at the end of each calendar month over a period of three years from the date of grant, such that each stock option shall be 100% vested on the third anniversary of its date of grant, subject to a director's continuing service on the Board through such dates. No portion of an option which is unexercisable at the time of a non-employee director's termination of membership on the Board shall thereafter become exercisable.

Vesting of Committee Chair Awards and Annual Awards

Options granted as Committee Chair Awards and as Annual Awards will become vested in equal installments at the end of each calendar month over a period of one year from the date of grant, such that each stock option shall be 100% vested on the first anniversary of the date of grant, subject to a director's continuing service on the Board through such date. No portion of an option which is unexercisable at the time of a non-employee director's termination of membership on the Board will thereafter become exercisable.

About Micromet Inc.

Micromet Inc. (Nasdaq: MITI) -- http://www.micromet-inc.com/-- is a biopharmaceutical company developing novel, proprietaryantibodies for the treatment of cancer, inflammation andautoimmune diseases. Four of its antibodies are currently inclinical trials, while the remainder of the product pipeline is inpreclinical development.

Going Concern

The company disclosed in its Form 10-Q for the first quarter of2008, that as of March 31, 2008, the company had an accumulateddeficit of $170.8 million, and its expects to continue to incursubstantial, and possibly increasing, operating losses for thenext several years. The company says that these conditions createsubstantial doubt about the company's ability to continue as agoing concern.

MORGAN STANLEY: S&P Affirms 'BB' Rating on Class II Notes---------------------------------------------------------Standard & Poor's Ratings Services raised its rating on the class IA notes issued by Morgan Stanley ACES SPC's series 2006-26, a synthetic corporate investment-grade collateralized debt obligation transaction, to 'AA' from 'AA-' and removed it from CreditWatch with negative implications, where it was placed on June 13, 2008. At the same time, S&P affirmed its 'BB' rating on the class II notes and removed it from CreditWatch with negative implications.

The upgrade and affirmation reflect a restructuring of the transaction in which trades were made to the reference portfolio that have improved the overall credit quality of the deal and have increased the synthetic rated overcollateralization figures for the tranches to more than 100%.

Rating Raised and Removed from Creditwatch Negative

Morgan Stanley ACES SPC Series 2006-26

Rating ------ Class To From ----- -- ---- IA AA AA-/Watch Neg

Rating Affirmed and Removed from Creditwatch Negative

Morgan Stanley ACES SPC Series 2006-26

Rating ------ Class To From ----- -- ---- II BB BB/Watch Neg

NEW CENTURY COS: Amends Note to Waive Penalties & Default Interest------------------------------------------------------------------Pursuant to a letter agreement between New Century Companies, Inc. and CAMOFI Master DDC, subject to the company's performance of its obligations under the Letter Agreement and the execution of further documentation to be prepared in connection with the Letter Agreement, CAMOFI has agreed to waive certain penalties and default interest which have been accrued under the transaction documents previously entered into with CAMOFI, including a 12% Senior Secured Convertible Promissory Note due Feb. 20, 2009, in the original principal amount of $3,500,000, Security Agreement, an Amended and Restated Registration Rights Agreement, and a Subsidiary Guaranty.

Pursuant to the Letter Agreement, the company will issue an amended and restated Note in the principal amount of $2,950,000 with a new maturity date of Aug. 1, 2010. Additionally, under the Letter Agreement:

1. Commencing on Aug. 1, 2008, and continuing thereafter on the first business day of every month for the next 24 months, the company will pay to CAMOFI $70,000, allocated first to the payment of interest and second to the payment of principal on the Amended Note.

2. On or before Aug. 22, 2008, the company will deposit $140,000 into a controlled account satisfactory to CAMOFI, and the company will take all actions necessary to ensure that so long as any amounts remain outstanding under the Amended Note, there will be no less than $140,000 in such controlled account.

3. Within three business days, the company will issue to CAMOFI five year warrants, entitling CAMOFI to purchase (i) 725,000 shares of Common Stock at an exercise price of $0.10 per share, and (ii) 725,000 shares of Common Stock at an exercise price of $0.20 per share. The shares of Common Stock issuable upon exercise of the Warrants, will have been previously registered such that all of such Warrant Shares will be freely tradable by CAMOFI immediately upon CAMOFI's exercise of the applicable Warrant. The Warrants will replace the previously issued warrants to CAMOFI.

4. Within three business days, the company will issue to CAMOFI a certificate representing 725,000 freely tradable shares of the company's common stock.

5. The company will timely deliver or cause to be delivered such other documents, instruments or agreements, opinions of counsel, as CAMOFI will reasonably request to enable it to make a public sale of the 675,000 shares of Common Stock previously delivered to CAMOFI by the company.

6. The company will (i) retain a restructuring advisor satisfactory to CAMOFI upon terms and conditions satisfactory to the company and CAMOFI, and (ii) continue the engagement of such restructuring advisor until any and all amounts owing by the company to CAMOFI have been repaid.

About New Century Cos.

Headquartered in Santa Fe Springs, California, New CenturyCompanies Inc. -- http://www.newcenturyinc.com/-- acquires, re- manufactures and sells pre-owned computer numerically controlledmachine tools to manufacturing customers. The company providesrebuilt, retrofit and remanufacturing services for numerous brandsof machine tools. It also manufactures original equipment CNClarge turning lathes and attachments under the trade name CenturyTurn. CNC machines use commands from on-board computers tocontrol the movements of cutting tools and rotation speeds of theparts being produced. New Century sells its services by directsales and through a network of machinery dealers across the UnitedStates. Its customers are generally medium to large-sizedmanufacturing companies in various industries, where metal cuttingis an integral part of their businesses.

New Century Companies Inc.'s consolidated balance sheet atMarch 31, 2008, showed $2,621,511 in total assets and $4,530,121in total liabilities, resulting in a $1,908,610 totalstockholders' deficit.

Going Concern Doubt

Squar, Milner, Peterson, Miranda & Williamson, LLP, raisedsubstantial doubt on the ability of New Century Companies, Inc.,to continue as a going concern after it audited the company'sfinancial statements for the year ended Dec. 31, 2007.

The auditor reported that the company has an accumulated deficitof around $11,233,000, a working capital deficit of around$1,425,000 and was in default on its convertible debt.

NORTH BAY: May Access North Healthcare's $1 Million DIP Fund------------------------------------------------------------The Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas gave North Bay General Hospital Inc. interim approval to tap $1 million in postpetition financing, The Deal relates, citing Debtor counsel, Michael Durrschmidt, Esq., at Hirsch & Westheimer PC. The Debtor is specifically authorized to draw amounts at $250,000 increments from the DIP fund, The Deal states.

Northern Healthcare Corp. LLC, which provided the Debtor $5 million in exit financing during its first bankruptcy case in 2005, agreed to extend $1 million to the Debtor when the hospital again filed for bankruptcy on July 8, 2008. Northern Healthcare is now owed $5.07 million in secured debt, court documents disclosed, The Deal notes.

Northern Healthcare's DIP fund carries an interest rate of 2.8 basis points per day and is secured by the Debtor's receivables, The Deal notes.

Based on the report, the Court set a final hearing on the DIP facility on July 29, 2008. The U.S. Trustee's request for appointment of a patient care ombudsman will also be heard on July 29, The Deal adds.

On the same day the hospital filed its recent bankruptcy, a creditor demanded $160,000 judgment as part of the the Debtor's 2005 bankruptcy case, The Deal quotes Mr. Durrschmidt as stating. Mr. Durrschmidt disclosed that, on behalf of Special Care Hospital Management Corp., a federal Marshall gave North Bay a writ of execution of judgment issued by the U.S. District Court for the District of Texas in Corpus Christi, The Deal writes.

Mr. Durrschmidt said that his client is eyeing a going-concern sale, according to The Deal.

Mr. Stacy, who was named as North Bay's president and director on June 30, 2008, filed the second chapter 11 petition on the Debtor's behalf, The Deal reports.

About North Bay

North Bay General Hospital, Inc. operates a 75-bed acute care medical facility on a 6-acre site in Aransas Pass, Texas. It employs about 206 workers. The hospital filed its chapter 11 petition on Feb. 9, 2005 (Bankr. S.D. Texas Case No. 05-32121). Judge Jeff Bohm presides over the case. Daniel F. Patchin, Esq., and Michael Leppert, Esq., at McClain, Leppert & Maney, P.C., represent the Debtor in its restructuring effort. The Debtor listed assets between $1 million and $10 million and debts between $1 million and $10 million. The Debtor's unsecured creditors received 110% recovery under its bankruptcy plan.

The hospital again filed its chapter 11 petition on July 8, 2008 (Bankr. S.D. Texas Case No. 08-20368). Michael J Durrschmidt, Esq., at Hirsch & Westheimer, represents the Debtor in its restructuring efforts. Judge Jeff Bohm presides over the case. When the Debtor filed its second chapter 11 petition, it listed $10 million to $50 million in assets and $10 million to $50 million in debts. The Deal said that the hospital valued itself at $10.6 million in its 2008 bankruptcy filing.

The recent issue surfaced after Legado Resources LLC made a$67 million offer to purchase Osyka's assets before the July 10 auction, Mr. Rochelle says. A hearing is set for July 21, 2008, to consider approval of the settlement, he relates.

Osyka previously entered into a settlement agreement with J. Aron in connection to the allocation of a minimum "strike price" of at least $67 million, as reported in the Troubled Company Reporter on April 14, 2008. J. Aron has agreed to put off its $66.5 million credit bid as part of the agreement, the TCR said.

As reported in the Troubled Company Reporter on April 28, 2008, the Court approved Osyka's proposed bidding procedures for the sale of its assets.

According to Bloomberg, Legado has the option to offer a bid of at least $81 million by July 23, 2008. In the event Osyka consummate the sale to another bidder, Legado will be paid a $1 million break-up, the report notes.

Bloomberg relates that the sale is connected to a process for approving a reorganization plan.

As reported in the Troubled Company Reporter on June 30, 2008, Osyka delivered to the United States Bankruptcy Court for the Southern District of Texas a joint Chapter 11 plan and disclosure statement explaining that plan.

A hearing is set for July 17, 2008, at 1:30 p.m., to consider theadequacy of Osyka's disclosure statement.

The plan contemplates the reduction of the Debtors' overall debtand payment obligations by at least $82 million associated withcorporate liabilities in order to realign their capital structure. The plan further provides more liquidity to the Debtors tocontinue to operate their business as a viable economic entity.

Among other things, each holder of allowed general unsecured claims will get its pro rata share of:

i) $200,000 in excess cash collateral, and

ii) 50% of the net recovery, receive from the BIP Holdings LLC litigation, if any, after all allowed claims are paid.

The BIP litigation is the causes of action arose out of theassignment of two sale and conveyance in 2006, between theOsyka and BIP, with respect to the sale of certain oil andgas leases and real property.

Headquartered in Houston, Texas, Osyka Corporation --http://www.osyka.com/-- is an oil and gas company. The company filed for Chapter 11 protection on March 3, 2008 (Bankr. S.D. Tex.Case No.08-31467). H. Rey Stroube, III, Esq., represents theDebtor in its restructuring efforts. No Official Committee ofUnsecured Creditors has been appointed in this case to date.

As reported in the Troubled Company Reporter on June 18, 2008,the Debtors' summary of schedules showed total assets of$109,754,313 and total debts of $83,792,755.

PERFORMANCE TRANS: Cases to be Converted to Ch. 7, Court Says-------------------------------------------------------------The U.S. Bankruptcy Court for the Western District of New York says Performance Transportation Services Inc. and its debtor-affiliates' Chapter 11 cases will be converted to cases under Chapter 7 of the Bankruptcy Code without further notice or hearing if no party-in-interest will object to a proposed order converting the cases.

As reported in the Troubled Company Reporter on June 16, 2008,Black Diamond Commercial Finance, L.L.C., agent for thePerformance Transportation Inc. and its debtor-affiliates'postpetition secured lenders, asked the U.S. Bankruptcy Court forthe Western District of New York to immediately convert theDebtors' Chapter 11 cases to Chapter 7.

The Court authorized Black Diamond Commercial Finance, L.L.C., agent for the Debtors' postpetition secured lenders, to submit the proposed order granting the conversion motion on one business day's notice to certain key stakeholders. Black Diamond sought conversion of the cases after a default by the Debtors under the DIP Facility and the continuing losses incurred by the Debtors while under Chapter 11. The strike by held by its International Brotherhood of Teamsters-represented employees put a nail to PTS II's coffin, as the strike forced PTS' main customers to move their business to other car haulers.

While Chapter 11 allows management to continue running day-to-day operations of the debtor and provides an opportunity to restructure, Chapter 7 mandates the appointment of a trustee, who will administer the estate and liquidate its assets.

The Hon. Michael J. Kaplan, however, notes that pending conversion, the Debtors will remain in the possession and management of their businesses and assets pursuant to the Bankruptcy Code, with all of the rights, powers and duties of debtors-in-possession. Jeff Cornish and John Stalker remain officers duly authorized to act on the Debtors' behalf.

Similar conversion requests were filed by (i) the U.S. Trustee and (ii) CIT Group/Business Credit, Inc. and Bayerische Hypo-und Vereinsbank AG, New York, the revolving lenders under the First Lien Credit Agreement. The U.S. Trustee, however, had proposed either the conversion or dismissal of the Chapter 11 cases.

DIP Lender Opposes Dismissal of Cases

Black Diamond asks the Court to deny the U.S. Trustee's request to dismiss the Chapter 11 cases as an alternative to converting the bankruptcy cases to cases under Chapter 7.

William J. Brown, Esq., at Phillips Lytle LLP, in Buffalo, New York, reiterates that following a hearing on Black Diamond's emergency request for conversion, the Court authorized Black Diamond to submit a proposed order granting the conversion motion on one business day's notice to certain key stakeholders.

Mr. Brown further relates that Black Diamond has been in discussions with, among others, the U.S. Trustee, the Debtors and, more recently, certain other parties-in-interest regarding the details of the proposed conversion order and a related stipulated order regarding the funding of the Chapter 7 liquidation.

Mr. Brown tells the Court that the U.S. Trustee's proposal will be moot, if and when the Court approves Black Diamond's conversion request.

The Court has already ruled as "moot" the conversion request by CIT and HVB.

About Performance Transportation

Performance Transportation Services Inc. is the second largesttransporter of new automobiles, sport-utility vehicles and lighttrucks in North America, and operates under three keytransportation business lines including: E. and L. Transport,Hadley Auto Transport and Leaseway Motorcar Transport.

The company and 13 of its affiliates previously filed for Chapter11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06-00107). The U.S. Bankruptcy Court for the Western District of NewYork confirmed the Debtors' plan on Dec. 21, 2006, and that planbecame effective on Jan. 29, 2007. Garry M. Graber, Esq. ofHodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Dayrepresented the Debtors in their restructuring efforts. When theDebtor filed for protection from their creditors it reported morethan $100,000,000 in total assets. It also disclosed owing morethan $100,000,000 to at most 10,000 creditors, including $708,679to Broadspire and $282,949 to General Motors of Canada Limited.

PERFORMANCE TRANS: May Use Cash Collateral Until July 9-------------------------------------------------------Performance Transportation Services Inc. and its debtor-affiliates sought the authority of the U.S. Bankruptcy Court for the Western District of New York to immediately and temporarily use cash collateral, nunc pro tunc to June 11, 2008, to wind down their operations and protect the collateral securing their obligations under their debtor-in-possession financing agreement and prepetition secured credit facilities. The Debtors will also use the cash collateral to satisfy certain payroll-related obligations of their Canadian entities.

Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York, tells the Court that the Debtors no longer have access to financing because, as previously reported, they have defaulted on their DIP agreement.

The Court entered orders authorizing the Debtors to use cash collateral until July 9.

The Debtors are required to secure Black Diamond Commercial Finance, L.L.C.'s, consent prior to paying each expense that exceeds $20,000. The Debtors' additional request for the use of cash collateral to satisfy certain payroll and benefits- related obligations not contained in the budget, including Canadian and Unites States payroll and prescription benefits, was denied. Amounts the Debtors spent before June 18, 2008, were capped at $250,000.

B. Budget for June 26 to July 2:

Chapter 7 - Liquidation Budget Expenditure Budget For Seven Days June 26 to July 2, 2008

The Debtors are required to secure Black Diamond's consent prior to paying each expense that exceeds $20,000, and any amount classified as contingency in the budget.

About Performance Transportation

Performance Transportation Services Inc. is the second largesttransporter of new automobiles, sport-utility vehicles and lighttrucks in North America, and operates under three keytransportation business lines including: E. and L. Transport,Hadley Auto Transport and Leaseway Motorcar Transport.

The company and 13 of its affiliates previously filed for Chapter11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06-00107). The U.S. Bankruptcy Court for the Western District of NewYork confirmed the Debtors' plan on Dec. 21, 2006, and that planbecame effective on Jan. 29, 2007. Garry M. Graber, Esq. ofHodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Dayrepresented the Debtors in their restructuring efforts. When theDebtor filed for protection from their creditors it reported morethan $100,000,000 in total assets. It also disclosed owing morethan $100,000,000 to at most 10,000 creditors, including $708,679to Broadspire and $282,949 to General Motors of Canada Limited.

The Troubled Company Reporter said on May 22, 2008, that Mr. Meisner filed a personal chapter 11 bankruptcy on May 21, 2008. Agroup of investors had filed an involuntary chapter 7 petition against Phoenix Diversified after learning the fund manager is insolvent and owes roughly $30,000,000 to more than 200 investors.

The Palm Beach Post relates that some 140 investors are asserting more than $140 million in claims against Phoenix Diversified.

Mr. Meisner said that investors may recover some or even all of their investments if Mr. Bakst would play ball, Palm Beach Post notes. In an e-mail, Mr. Meisner alleged that the case trustee is not handling the case in the best interest of lenders, Palm Beach Post relates. Mr. Meisner added that Mr. Bakst isn't willing to consider "lucrative" offers for the Debtor's special proprietary trading software, the report says.

Mr. Bakst explained that what he received are offers to engage in joint venture with the Debtor and raise funds from new investors, which the case trustee said won't happen, Palm Beach Post notes. Mr. Bakst maintained that he won't allow the Debtor to do business with any investor pointing that Mr. Meisner had refused to provide financial information on the Debtor pursuant to a court order, Palm Beach Post says. Mr. Meisner may be asked to pay fines and serve in prison if he continues to cooperate, the report reveals.

Mr. Meisner's counsel, Scott Hecker, Esq., said that Mr. Bakst's request is going nowhere, according to the report.

Mr. Bakst said that Mr. Meisner must cooperate and has to show where all of the investors money went, Palm Beach Post reports.

Court documents showed that Mr. Meisner received $470,597 in salary in 2006, $1.3 million in 2007, and $260,000 up until Phoenix Diversified filed for bankruptcy, Palm Beach Post notes. Mr. Meisner also owns $1.6 million in real property. His monthly expenses averages $17,380 according to court documents, Palm Beach Post says.

A public sale of Phoenix Diversified's assets is set for July 20, 2008 in West Palm Beach, according to the report.

About Michael Meisner

Michael A. Meisner in Boca Raton, Florida filed a chapter 11 petition on May 19, 2008 (Bankr. S.D. Fla. Case No. 08-16502). Judge Paul G. Hyman, Jr., presides over the case. Sherri B. Simpson, Esq., at Law Offices of Sherri B. Simpson, P.A., represents the Debtor in his restructuring efforts. He listed estimated assets of $1 million to $10 million and estimated debts of $1 million to $10 million when he filed for bankruptcy.

About Phoenix Diversified Investment

Phoenix Diversified Investment Group is a commodities investmentfirm based in Boca Raton, Florida owned by Michael Meisner. Lewis Freeman, of Lewis B. Freeman & Partners in Miami, is a court-appointed receiver in the case against Phoenix Diversified. The company faced an involuntary chapter 7 petition filed by a group of investors after learning that the company is insolvent. About 200 investors asserted claims of more than $140 million against the Debtor.

PIERRE FOODS: Moody's Assigns D Rating After Bankruptcy Filing--------------------------------------------------------------Moody's Investors Service lowered the probability of default rating of Pierre Foods, Inc. to D from Ca/LD, following the company's statement that it and its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy code.

The company's long-term ratings were confirmed and its speculative grade liquidity rating was affirmed. The rating outlook is stable. This rating action concludes the review for possible downgrade that initially began on May 28, 2008 and was subsequently continued on June 2nd, July 1st and July 14th. Moody's will withdraw the company's ratings due to the bankruptcy filing shortly.

High and rising protein and raw materials costs severely hurt Pierre's profitability. Adding back unusual charges and impairments, reported operating profit was only $20 million (3.1% of sales) for the fiscal year ended March 1, 2008, down from a margin of 5.7% in the prior year.

The majority of Pierre's are not protected from commodity exposure via either market-related pricing contracts or USDA Commodity Reprocessing Program. Profitability has also been hurt, to a lesser extent, by sales of net lower-margin products in the Zartic business and by outsourcing as a result of the destruction of the Hamilton, Alabama facility.

As a consequence, debt to EBITDA for fiscal 2008, proforma for unusual items, was 19.8 times. The company defaulted under its bank financial covenants and later failed to pay a scheduled interest payment to its bank lenders on June 30, 2008.

On July 8th, the agent for the bank lenders delivered a Payment Blockage Notice to Pierre and to the Trustee under Pierre's June 30, 2004 senior subordinated indenture. The Payment Blockage Notice prohibited Pierre from making any payment or distribution of assets on account of the senior subordinated obligations, including the interest payment on the senior subordinated notes scheduled for July 15, 2008.

Pierre has received a commitment for up to $35 million of debtor-in-possession financing from certain funds managed by Oaktree Capital Management L.P., and is in restructuring discussions with Oaktree affiliates that may involve the conversion of the company's debt into equity.

Revenues for fiscal year ended March 1, 2008 were approximately $643 million. The company was purchased by Madison Dearborn Partners and certain members of Pierre's management on June 30, 2004.

PILGRIM'S PRIDE: Divests Tray-Pack Chicken Biz, Cuts 600 Positions ------------------------------------------------------------------Pilgrim's Pride Corporation disclosed plans to consolidate the tray-pack chicken business from its El Dorado, Arkansas, processing plant into six other case-ready facilities. After the transition, which is expected to be completed within 60 days, the El Dorado facility will operate as a supply plant.

Approximately 600 of the 1,215 positions at the El Dorado plant will be eliminated by Sept. 19, 2008. Most of the positions eliminated will be hourly jobs in chicken processing. Contract growers and employees in live operations will not be affected.

Pilgrim's Pride will provide transition programs to employees whose positions are eliminated to assist them in securing new employment, filing for unemployment and other applicable benefits.

"Since March, we have been conducting a thorough review of all ourproduction facilities to ensure we are operating as efficiently as possible in response to the unprecedented challenges facing our company and our industry," Clint Rivers, Pilgrim's Pride president and chief executive officer," said.

"We are confident that the changes disclosed, which conclude the formal review of our operations, will help position Pilgrim's Pride as a stronger competitor," he said. "By consolidating the tray-pack volume from El Dorado into our six remaining case-ready plants, we can position our entire case-ready division to operate more efficiently."

"As a supply plant, our El Dorado facility will be able to take full advantage of its efficient live-production cost structure to help us deliver even better value to our customers," he concluded.

In April, Pilgrim's Pride acknowledged that the El Dorado plant was among those being reviewed for possible closure or consolidation. Over the past several months, the company had been working with elected officials and the union representing members at the plant to improve its financial performance. However, union members recently rejected proposed benefits changes that would have made the plant more competitive.

Separately, the company also disclosed plans to close its distribution center in El Paso, Texas within the next 60 days. That facility employs approximately 34 people. After the closing, Pilgrim's Pride will operate a total of six distribution centers in Texas, Arizona and Utah.

"While the decision to close or consolidate locations is alwaysdifficult, we believe the actions we are announcing today are absolutely necessary for our business and our company," said Mr. Rivers.

The company does not expect to incur any material financial charges related to the statements.

As reported in the Troubled Company Reporter on July 14, 2008,Moody's Investors Service downgraded the ratings of Pilgrim'sPride Corporation, including the company's corporate family ratingand probability of default rating to B1 from Ba3. The ratingoutlook is stable. This rating action concludes the review forpossible downgrade begun on April 16, 2008.

PIPER RESOURCES: Court Extends CCAA Protection Until July 22------------------------------------------------------------Piper Resources Ltd. requested and was granted an adjournment of a July 15, 2008 CCAA court proceedings until July 22, 2008, which extended its stay under CCAA protection until that date.

On Feb. 17, 2008, Piper was granted protection under the Companies Creditors' Arrangement Act by an Initial Order from the Alberta Court of Queen's Bench which stayed its creditors from enforcing their rights until March 17, 2008. The protection was extended by subsequent court orders on March 17, 2008, April 28, 2008 and June 12, 2008. The June 12, 2008, court order extended the protection to July 15, 2008.

While under CCAA protection, the board of directors maintains its usual role and management of the company remains responsible for the day to day operations. The materials filed to date in the CCAA proceedings are available by contacting the Monitor at(403) 298-5999 or by e-mail at piper@deloitte.ca.

Headquartered in Calgary, Alberta, Piper Resources Ltd. is a non-listed exploration, development and production company pursuingconventional oil and natural gas opportunities in western Canada.The company's core areas are focused in the Peace River arch areaof northwestern Alberta, with operated production in theGordondale, Pouce Coupe and Sinclair areas.

On Feb. 15, 2008, Piper Resources Ltd. obtained creditorprotection under the Companies Creditors Arrangement Act (Canada)pursuant to an Order from the Alberta Court of Queen's Bench. Piper Resources engaged Tristone Capital Inc. as its financialadvisor to pursue strategic alternatives for the company inconjunction with the CCAA proceedings.

PLASTECH ENGINEERED: Court Extends Plan-Filing Period to July 31----------------------------------------------------------------The U.S. Bankruptcy Court for the Eastern District of Michigan approved the request by Plastech Engineered Products Inc. and its debtor-affiliates and major parties-in-interest to further extend the exclusive period within which the Debtors may file one or more reorganization plans, or a motion to extend the Plan Period through July 31, 2008. The Plan Period was previously extended until July 11.

The Debtors' exclusive Solicitation Period for Plan acceptances is until Aug. 4, 2008.

The parties-in-interest include Chrysler, LLC, Goldman Sachs Credit Partners L.P., as Agent to the Prepetition First Lien Term Lenders, the Steering Committee of First Lien Term Loan Lenders, and the Official Committee of Unsecured Creditors.

About Plastech Engineered

Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. Itdesigns and manufactures blow-molded and injection-molded plasticproducts primarily for the automotive industry. Plastech'sproducts include automotive interior trim, underhood components,bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company,and Toyota, as well as Johnson Controls, Inc.

Plastech is a privately held company and is the largest family-owned company in the state of Michigan. The company is certifiedas a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in themidwestern and southern United States. The company's products aresold through an in-house sales force.

As reported in the Troubled Company Reporter on June 5, 2008, the Debtors previously sought to reject 75 reclamation demandsfrom certain vendors and suppliers. The Debtor said that the reclamation claimants will presumably seek administrative expense treatment pursuant to Section 546 of the U.S. Bankruptcy Code on account of their Reclamation Claims, which aggregate $17,800,000.

The Debtors are authorized under Section 546(h) -- subjectto the limitations imposed by any Court order and the priorrights of holders of security interests in the goods or theproceeds of the goods under (a) the Debtors' proposed DIPfinancing, and (b) the prepetition secured financing agreementsto return to vendors goods that were delivered prepetition -- foran offset of the purchase price of the goods against the vendors'prepetition claims.

Basell USA contends the facts asserted by the Debtors relative to the value of assets, and the nature and extent of secured claims requires an evidentiary hearing or adversary proceeding. The Debtors' requested relief, Basell maintains, is for a denial of its administrative claim and expense status, making the motion and requested relief appear to be inconsistent.

The Debtors previously objected Basell's Reclamation Demand dated Feb. 8, 2008, on the ground that "goods . . were subject to the prior rights of holders of a security interest in the goods or their proceeds."

Scott A. Chernich, Esq., counsel to Basell, at Foster, Swift, Collins & Smith, P.C., in Lansing, Michigan, citing Norton Journal of Bankruptcy Law and Practice, asserts that, "[A]ll that need be shown under Section 503(b)(9) of the Bankruptcy Code is that goods were sold to the debtor within the 20 days prior to filing and that this obligation remains unpaid. . . . Now, notwithstanding the existence of a superior lien, the 503(b)(9) claimholder will receive the administrative claim."

For their part, Empire Electronics and Acord Holdings complain that the Debtors have not neither provided any evidence that the goods subject to the reclamation demand were consumed prior to receiving the demand, nor that the goods were subject to prior rights of security interest holders.

Basell claims $1,532,214 as administrative expense, while Empire Electronics asserts a $51,055 administrative claim. Acord asserted $849,065 as prepetition claim, $283,092 of which represents goods delivered within 20 days prior to the date of bankruptcy.

Acord further asserts its claims are secured by liens on tooling under the Michigan Special Tools Lien Act, pursuant to which Acord is entitled to a right to setoff up to the amount owed to the Debtors. Acord discloses it has payables to the Debtors as of the Petition Date.

Debtors: Reclamation Goods Part of Lenders' Collateral

The Debtors maintain that the goods the dissenting creditors sought to repossess under each of their reclamation demands comprise the liquid collateral that secure the Prepetition Secured Lenders' prior rights:

(i) $100,000,000 Revolving Credit Facility, with a first priority lien;

(ii) $265,000,000 First Lien Term Loan Credit Agreement, with a second priority lien;

(iii) $100,000,000 Second Lien Term Loan Credit Agreement, with a lien junior to the First Lien Term Lenders' second lien.

Pursuant to a Court-approved Settlement Agreement with the Prepetition Secured Parties, all of the liens on the Debtors' property, with respect to the prepetition secured loans were deemed legal, valid, binding, perfected and non-avoidable. The Prepetition Secured Lenders even will not receive full payment for allowed secured claims on the liquid collateral, the Debtors inform.

Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, cites In re Dana Corp., 367 B.R. 409, 421, where the Court held reclamation claims "valueless" because the goods remained subject to either prepetition indebtedness or were pledged to the DIP Lenders.

Given these arguments, the Debtors seek that the Court disallow the Reclamation Claims as administrative or secured claims, subject to the creditors' right to contend that their claims are entitled to administrative priority under Section 503(b)(9) of the Bankruptcy Code.

Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. Itdesigns and manufactures blow-molded and injection-molded plasticproducts primarily for the automotive industry. Plastech'sproducts include automotive interior trim, underhood components,bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company,and Toyota, as well as Johnson Controls, Inc.

Plastech is a privately held company and is the largest family-owned company in the state of Michigan. The company is certifiedas a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in themidwestern and southern United States. The company's products aresold through an in-house sales force.

PRUDENTIAL AMERICANA: Judge Markell Approves Reorganization Plan ----------------------------------------------------------------Prudential Americana Group exited a debt restructuring it entered in November 2007. Judge Bruce Markell of the U.S. Bankruptcy for the District of Nevada approved CEO Mark Stark's reorganization plan.

"It was a huge amount of work to manage the reorganization while at the same time running a company in the most challenging real estate environment Las Vegas has ever seen," Mr. Stark said. "During the eight month process of reorganizing, I worked very hard to keep all my agents and employees in the loop to help retain my top people well as keep the rumors at bay," related Mr. Stark.

"This company was built on core values and long-term thinking," he said. "Our people were informed about every step of the process with open and honest communication. As a result, they supported the company, believed in the plan and look forward to our future successes."

During its reorganization, Prudential Americana Group remained the top real estate company in Las Vegas with more than double the sales of its nearest competitor in both 2007 and 2008.

"We are continuing our commitment of partnering with the brightest talent available in the market," Mr. Stark said. "Last week the company merged with O'Keefe and Casto, an independent Las Vegas real estate firm. Nearly two dozen agents of the firm's agents are now part of Prudential Americana Group, bringing its total to nearly 1,100 in Southern Nevada.

Mr. Stark said part of the company's reorganization success is due to a commitment from its franchisor, Prudential Real Estate Affiliates Inc. The company offered its support during the reorganization and has joined the company as a minority partner.

According to Mr. Stark, Prudential Americana Group's ability to reorganize in the face of a difficult real estate environment shows that the market is down, but not out.

"With all market changes, opportunity arises," he said. "Many are now realizing that there is a great opportunity to do well in this market by taking advantage of the downturn. It will not be down forever."

Mr. Stark said he believes the market correction has helped weed out those agents and brokers who weren't serious about the business and may not have been as effective as those who survived the shift.

"The key change I have seen in the business environment is that it is no longer acceptable to be mediocre in this profession,". he said. "All ships rise in high tides. The business players of the future will have to provide true value to their clients or they will simply not survive."

Provisions of the Plan

As reported in Troubled Company Reporter on Jul 9, 2008, the planprovides for a resolution of a dispute among the Debtors and their outside brokers and agents who were made to believe that Prudential Americana continues to be Las Vegas' largest brokerage firm although its size has substantially shrunk in the past three years, Business Press says. Prudential Americana planned to pay in full a $70,000 in referral payments owed to brokers and agents, the report states.

Judge Markell said that the Debtors have not justified their preferential treatment to outside brokers and agents, Business Press says. Under the plan, the Debtors would pay roughly 5.5 cents on the dollar on $15.5 million owed to other unsecured creditors, Business Press writes.

Mark Stark, CEO and owner, was to remain in control of the Debtors in exchange for a $500,000 investment and write-off of $1.6 million he loaned to the Debtors in 2007, Business Press says. Affiliates would invest $7.1 million in loans and new equity of 40% under the plan, Business Press noted.

Peninsula Capital Partners which is owed $14.5 million would get $800,000 under the plan. Peninsula Capital counsel, Richard Holly, Esq., at Santoro, Driggs, Walch, Kearney, Holley & Thompson, alleged that Prudential Americana filed for bankruptcy to reduce its loan and to keep it atop the market, Business Press states.

Prudential Americana disclosed that its value has dwindled down from $24.3 million to $3.7 million, impairing the security of Peninsula Capital, Business Press says.

Under the plan, Zions First National Bank would be satisfied through the first mortgage it holds, Business Press reports.

A-Title LLC was incorporated on Nov. 8, 2001, and 100% owned byHoldings. A-Title owns 37.5% of Equity Title LLC. It is not themanaging member, and holds only a passive equity position inEquity Title. As co-maker of certain secured notes, it has fileda Chapter 11 bankruptcy petition with the other entities that areco-makers of the notes.

Americana LLC is a party to a Real Estate Brokerage FranchiseAgreement dated March 24, 1999, as amended, between The PrudentialReal Estate Affiliates Inc. as franchisor and Americana asfranchisee. Americana is 100% owned by Holdings. Americana isthe operating entity of the Debtor group, and also owns 100% ofeach of (i) Referral; and (ii) SPO Payroll LLC, a company that isdefunct and will be dissolved under state law.

American Eagle Referral Service LLC is 100% owned by Americana andacts as its own brokerage and hires inactive agents and words toprocure referred clients from these agents. These clients arereferred into Americana LLC to facilitate a real estatetransaction and a referral fee is paid to Referral for thisbusiness. Referral subsequently has an agreement with the agentsfor a percentage of the referral compensation that is paid.

QUALITY DISTRIBUTION: Moody's Junks B3 Corporate Family Rating--------------------------------------------------------------Moody's Investors Service has downgraded the corporate family and probability of default ratings of Quality Distribution (QDI) to Caa1 from B3 and changed the ratings outlook to stable from negative.

The downgrades reflect the weakened economic environment that has begun to impact QDI's shipping volumes. In March and April 2008 volumes declined 5%, though the company raised prices 3%, which helped partially offset the volume decline. In Moody's view economic weakness will continue impacting QDI's operating performance at least into early 2009 and will cause free cash flow generation at approximately a break even level.

For the last 12-month period ended March 31, 2008, the company's leverage ratio was 7.6 times on a Moody's adjusted basis; although this metric should improve in fiscal year 2008 due to the full year impact of Boasso, which was acquired in December 2007, low likelihood now exists of QDI's earnings improving over 2008 such that leverage would decline materially below the 7.0 times level.

The stable outlook reflects QDI's leading position in the tank truck market and an adequate liquidity profile. As of March 31, 2008 QDI had cash of $2.7 million and borrowing availability of $55.5 million under its asset-backed revolving credit facility. A minimum fixed charge covenant test on the revolving credit facility would apply if availability were to decline below $20 million.

The stable outlook also reflects cost-cutting measures, including a 17% headcount reduction that QDI has recently undertaken in response to weaker shipping volumes. The company's ability to reduce costs and remain efficient while managing through the soft demand period, and turning around unprofitable affiliates recently acquired, will impact the potential for upward ratings momentum once volumes return and free cash flow turns materially positive.

These ratings that have been downgraded:

-- Corporate family rating to Caa1 from B3 -- Probability of default to Caa1 from B3

Quality Distribution, LLC and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a leading transporter of bulk liquid and dry bulk chemicals. Apollo Management, L.P. owns approximately 52% of the common stock of Quality Distribution, Inc.

RESIDENTIAL CAPITAL: FDIC Gives GMAC 10-Yr Waiver on Banking Unit-----------------------------------------------------------------GMAC Financial Services on Wednesday said the Federal Deposit Insurance Corporation has granted a 10-year extension of GMAC Bank's current ownership by extending the existing disposition requirement that was established in connection with the sale of a majority stake in GMAC.

The Wall Street Journal's Aparajita Saha-Bubna says the FDIC's decision was a much needed boost for GMAC, which allows the financing arm of General Motors Corp. to raise funds at competitive rates.

"We are very pleased with the FDIC's prompt action on our waiver request," said GMAC Chief Executive Officer Alvaro G. de Molina. "The long-term extension granted by the FDIC will permit us to strengthen GMAC Bank, which provides an important source of funding for mortgage and automotive financing activities.

"This development along with the successful completion of the global refinancing announced last month helps to enhance flexibility during this turbulent market environment," said de Molina.

The FDIC's action includes requirements related to capital levels at GMAC Bank and the company as a whole.

"It's a positive on the funding side," said Richard Hofmann, an analyst at independent research firm CreditSights, according to the Journal. Mr. Hofmann, the Journal quotes, said GMAC Bank has "become a more critical funding source for the company as the credit crisis has heightened," citing that "[a] bank is an easier way to bring in funding at a very competitive price."

GMAC Bank, according to the Journal, is a so-called industrial-loan corporation, which are FDIC-supervised lenders that offer a way for commercial firms to own banks without being regulated by a federal banking agency.

According to the Journal, when Cerberus bought a 51% GMAC stake, the FDIC had imposed a moratorium on the approval of banks owned by nonfinancial companies, like Wal-Mart Stores Inc., to allow Congress to debate the issue of mixing banking and commerce. Despite the freeze, the Journal continues, the FDIC granted Cerberus and GMAC's application because of "the unique circumstances" of GM's restructuring. In exchange, GMAC and Cerberus were to satisfy one of several conditions by November:

-- sell GMAC Bank;

-- have the bank cease using FDIC insurance; or

-- register as a bank holding company.

If none of these terms could be achieved, Cerberus would have to get an FDIC waiver, the Journal says.

FDIC Waiver Good for Rescap Too

According to the Journal, as the credit crunch has made short-term financing costly and scarce, GMAC Bank's $15.3 billion in deposits and $10.8 billion in Federal Home Loan Bank advances have become increasingly important sources of stable, low-cost funding, particularly for Residential Capital LLC, GMAC's struggling mortgage subsidiary.

Mr. Hofmann, the Journal relates, said the FDIC waiver is important for ResCap because it has difficulty getting funds on an unsecured basis.

"Look at GMAC bank, it's loaded up with mortgages," the Journal quotes Mr. Hofmann as saying.

The Journal says more than two-thirds of GMAC Bank's $30.3 billion assets as of the first quarter were made up of mortgage assets as prime loans, which are made to those with strong credit. GMAC Bank accounted for about 30% of ResCap's funding in 2007, the Journal says.

About GMAC LLC

GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financialservices company that operates in approximately 40 countries inautomotive finance, real estate finance, insurance and othercommercial businesses. GMAC was established in 1919 and employsapproximately 26,700 people worldwide.

GMAC Financial Services is in turn wholly owned by GMAC LLC.

Cerberus Capital Management LP led a group of investors that bought a 51% stake in GMAC LLC from General Motors Corp. in December 2006 for $14 billion.

About ResCap

Headquartered in Minneapolis, Minnesota, Residential Capital LLC-- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMACLLC.

* * *

As disclosed in the Troubled Company Reporter on June 18, 2008,Moody's Investors Service assigned ratings of Caa2 and Caa3 toResidential Capital LLC (ResCap)'s senior secured and juniorsecured bonds, respectively. These bonds were issued as part ofResCap's bond exchange which was completed on June 4, 2008. Theratings of ResCap's unsecured senior debt and unsecuredsubordinate debt were affirmed at Ca and C, respectively. Ratingsare under review for downgrade. Separately the senior unsecuredrating of GMAC LLC was downgraded to B3 from B2 with a negativeoutlook.

As disclosed in the Troubled Company Reporter on June 9, 2008,Fitch Ratings has downgraded Residential Capital LLC's long- andshort-term Issuer Default Ratings to 'D' from 'C' followingcompletion of the company's distressed debt exchange. Fitch hasalso removed ResCap from Rating Watch Negative, where it wasoriginally placed on May 2.

S&P also assigned issue and recovery ratings to Residential Capital LLC's $1.67 billion, 8.5% senior secured guaranteed notes due 2010; its $4.0 billion, 9.625% junior secured guaranteed notes due 2015; and its unsecured debt. Residential Capital LLC's senior secured notes (second lien) were rated 'CCC+', equal to the long-term counterparty credit rating, with a recovery rating of '3' indicating expectations for a meaningful recovery (50%-70%) in the event of default. Residential Capital LLC's junior secured notes (third lien) were rated 'CCC-', two notches below the long-term counterparty credit rating of 'CCC+', with a recovery rating of '6', indicating expectations for a negligible recovery (0%-10%) in the event of a default. Residential Capital LLC's unsecured debt was rated 'CCC-', two notches below the long-term counterparty credit rating of 'CCC+', with a recovery rating of '6', indicating expectations for negligible recovery (0%-10%) in the event of a default.

"The counterparty credit rating reflects Residential Capital LLC's still-strong market position in its core residential mortgage banking businesses, and its geographic diversification. However, these positives are overwhelmed by developments in the mortgage business in general and at Residential Capital LLC more specifically," said Standard & Poor's credit analyst John K. Bartko, C.P.A. The company's exposures to high-risk asset types and its wholesale funding profile resulted in massive valuation and loss charges, while the wholesale funding presented additional challenges as the company navigated through a liquidity crisis.

Indeed, various support efforts on the part of GMAC LLC (B/Watch Neg/C) and ultimate parents General Motors Corp. (GM; B/Watch Neg/--) and Cerberus (unrated) are the reasons for Residential Capital LLC's solvency to date. Finally, Residential Capital LLC executed on a debt exchange that S&P considered distressed and coercive. S&P therefore lowered its rating on Residential Capital LLC to 'SD' (selective default) on June 4, 2008, while the affected debt issuances were lowered to 'D'. The exchange highlights the company's precarious position.

Residential Capital LLC operates as a global real estate finance company, and since inception, its operations have been separate and distinct from those of its parent company, GMAC. Residential Capital LLC is an indirect wholly-owned subsidiary of GMAC which itself is 51% owned by a consortium led by Cerberus FIM Investors LLC and 49% by GM. It is a noncaptive finance company, and although GMAC management has expressed no intention, S&P assume that GMAC could divest its stake in Residential Capital LLC.

Residential Capital LLC's debt exchange reduced scheduled debt maturities and decreased funding costs, affording the company about two years before sizable unsecured debt matures. However, mortgage market turmoil does not appear to be abating and therefore the outlook is negative. The company remains highly vulnerable to issues related to out-of-favor mortgage assets and to reduced support capacity and/or willingness on the part of GMAC, GM, and Cerberus.

SALTON INC: S&P Withdraws Ratings After Proposed Spectrum Deal--------------------------------------------------------------Standard & Poor's Ratings Services withdrew its ratings on small appliance manufacturer Salton Inc. and its wholly owned subsidiary, Applica Pet Products LLC, including the 'B+' corporate credit ratings on both entities. These ratings were based upon Salton Inc.'s proposed acquisition of the global pet business from Spectrum Brands Inc. (CCC+/Watch Pos/--). Proceeds from the proposed bank loan facility to Applica Pet were to finance the acquisition by Salton. On July 14, 2006, both parties announced that it terminated the sale agreement, thus S&P are withdrawing all related ratings.

Under the terms of the acquisitions, Saratoga paid an aggregate of $105,683,000 in cash and issued 4,900,000 shares of Saratoga common stock for 100% of ownership of both Harvest companies.

Pursuant to the terms of the acquisitions, a portion of the cash paid was applied to retire all existing bank debt of Harvest and a portion of the cash paid and shares of stock issued were applied to eliminating an existing net profits interest in Harvest's properties.

Financing for the Harvest acquisition was provided through a $97.5 million second lien senior note facility and a $25 million first lien senior revolving credit facility. Pursuant to the terms of the second lien note facility, Saratoga issued a warrant to purchase an aggregate of 805,515 shares of common stock at $0.01 per share.

Macquarie Americas Corp., a subsidiary of Macquarie Group, received 3,300,000 of the shares of common stock issued pursuant to the acquisition, or approximately 20.8% of the outstanding shares after the acquisition.

"We are extremely pleased to have completed the Harvest acquisitions and associated financing and look forward to continuing to develop what we believe is a very promising portfolio of properties and a great first step in implementing our plan to acquire, develop and operate strategic oil and gas properties with unrealized value," Thomas Cooke, chairman and CEO of Saratoga, stated. "Most of the Harvest team will stay in Covington where we will grow our presence as well as open an office in Houston."

About Harvest Oil & Gas LLC and The Harvest Group LLC

Based in Covington, Louisiana, Harvest owns, manages and operates producing oil and gas properties in South Louisiana onshore and the state waters of the Gulf of Mexico. Proved reserves of Harvest totaled 67.3 bcfe or 66% gas versus oil based on a Jan. 1, 2008, third-party engineering report. Average daily net production of Harvest for May 2008 was 1,656 bopd and 4,467 mcfgpd, or 2,401 boepd or 31% gas versus oil.

About Saratoga Resources Inc.

Based in Austin, Texas, Saratoga Resources Inc. (OTCBB: SROE) is an energy development company. Saratoga's focus is on the acquisition, development and exploration of energy resources while maintaining operations and environmental standards. The company's operations and operating assets are focused in the U.S. gulf coast region.

As reported in the Troubled Company Reporter on May 29, 2008,Saratoga Resources Inc.'s consolidated balance sheet at March 31,2008, showed $1,097,429 in total assets and $1,927,268 in totalliabilities, resulting in a $845,606 total stockholders' deficit.

At March 31, 2008, the company's consolidated balance sheet alsoshowed strained liquidity with $49,402 in total current assetsavailable to pay $1,927,268 in total current liabilities.

Going Concern Doubt

Saratoga had a cash balance of approximately $184 and a workingcapital deficit of approximately $1,877,866 at March 31, 2008.Saratoga during 2008 had limited capital resources and limitedoperating revenues to support its overhead.

Saratoga is dependent upon its principal shareholder to providefinancing to support operations and ongoing cost control measuresto minimize negative cash flow.

SEA CONTAINERS: Employees Have Until August 25 to File Claims-------------------------------------------------------------The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware, at Sea Containers Ltd. and its debtor-affiliates' request, issued a supplemental order establishing Aug. 25, 2008, as the bar date to file proofs of claim for current or former employees holding, or wishing to assert claims against the Debtors. Judge Carey also approved the proposed revised Bar Date Notice and Proof of Claim form.

With respect to any employee residing in Great Britain that is subject to the jurisdiction of the Courts of England & Wales, the Employee Bar Date will apply solely to these claim categories:

(a) claims set forth under Category 5 of Schedule 6 for the United Kingdom Insolvency Act 1986, which include certain claims for remuneration and holiday remuneration;

(b) claims set forth under Sections 502(b)(7) and 507(a)(4) of the Bankruptcy Code, which include certain claims for damages resulting from termination of an employment contract, and wages, salaries or commissions, like vacation, severance and sick leave pay; and

Judge Carey ruled that claims based solely on amounts, which are or may be payable by the Debtors, the Sea Containers 1983 Pension Scheme or the Sea Containers 1990 Pension Scheme as a result of, or in connection with, current or former participation in either of the Pension Schemes, will not be subject to the Employee Bar Date.

The Court noted that (i) pursuant to the original Bar Date Order, the current order will not apply to the Pension Trustees, which are subject to the General Bar Date with respect to all claims under the Pension Schemes, and (ii) an employee need not assert a claim against the Debtors solely on a participation interest in the Pension Schemes.

Judge Carey also directed the Debtors to publish the Revised Bar Date Notice in the English edition of The London Times, at least once 30 days prior to the Employee Claims Bar Date.

About Sea Containers

Based in Hamilton, Bermuda, Sea Containers Ltd. --http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda,the company has regional operating offices in London, Genoa, NewYork, Rio de Janeiro, Sydney, and Singapore. The company isowned almost entirely by United States shareholders and itsprimary listing is on the New York Stock Exchange (SCRA andSCRB) since 1974. On Oct. 3, the company's common shares andsenior notes were suspended from trading on the NYSE and NYSEArca after the company's failure to file its 2005 annual reporton Form 10-K and its quarterly reports on Form 10-Q during 2006with the U.S. Securities and Exchange Commission.

Through its GNER subsidiary, Sea Containers Passenger Transportoperates Britain's fastest railway, the Great North EasternRailway, linking England and Scotland. It also conducts ferryoperations, serving Finland and Estonia as well as a commuterservice between New York and New Jersey in the U.S.Sea Containers Ltd. and two subsidiaries filed for chapter 11protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., atYoung, Conaway, Stargatt & Taylor, represent the Debtors intheir restructuring efforts.

The Official Committee of Unsecured Creditors and the FinancialMembers Sub-Committee of the Official Committee of UnsecuredCreditors of Sea Containers Ltd. is represented by William H.Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'sOfficial Committee of Unsecured Creditors is represented byattorneys at Willkie Farr & Gallagher LLP.

SEA CONTAINERS: SCL Panel Still Not Convinced of Pension Pact OK----------------------------------------------------------------The Official Committee of Unsecured Creditors in Sea Containers Ltd. and its debtor-affiliates' Chapter 11 cases tell the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware that it still does not want the pension scheme agreements approved because the amounts involved are "unreasonable."

(5) the SCL Group's other participating employers' liability to the Pension Schemes and SCL's exposure to future Financial Support Directions, or FSDs, in connection with pension liabilities, defined as debt;

(6) the liability of other entities in the SCL group under future FSDs;

(7) the extent to which the Pension Settlement enables the Debtors to achieve key goals, and obtain important benefits that are unavailable absent settlement;

(8) the reasonableness of Neville Hosegood's calculations of the debt under Section 75 of the Pensions Act 1995;

(9) the Pension Schemes' investment allocation and rates of return, and their lack of relevance to the Debtors' buy- out liability;

(10) the reasonableness of the equalization reserve component of the Pension Settlement;

(11) the reasonableness of the administrative claim for postpetition expenses incurred by the Pension Schemes;

(12) the FSDs' non-violation of the automatic stay and the Official Committee of Unsecured of Sea Containers Limited's awareness of the FSD proceedings; and

(13) the Pension Settlement not constituting a sub rosa plan of reorganization.

The Debtors also pointed out that the Pension Settlement (i) is the only realistic option for resolving the Pension Claims, (ii) was the product of vigorous negotiations between the parties over a lengthy period of time, (iii) facilitates the Debtors' objectives, and (iv) provides additional protections to the Debtors. They insist that rejection of the Pension Settlement would put the bankruptcy estates at risk of severe consequences.

B. SCSL Committee and Pension Trustees

The Official Committee of Unsecured Creditors of Sea Containers Services Limited, and the Trustees of the Pension Schemes also submitted to the Court a summary of the evidentiary record that supports the Debtors' request for approval of the Pension Settlement, specifically evidence:

(1) showing that U.K. has the most significant relationship to the valuation of the Pension Schemes' claims;

(2) concerning applicable U.K. pensions law;

(3) showing that the Pension Claims are reasonable, including grounds that:

-- the buy-out basis is the appropriate measure for valuing pension scheme liabilities, where the employer is insolvent;

-- whether a Section 75 trigger has occurred or not is irrelevant to the calculation of the Pension Claims; and

-- the FSDs issued against SCL are based on the Pension Schemes' buy-out deficits;

-- the 2007 edition of the Purple Book, a joint publication of the Pensions Regulator and the Pension Protection Fund, does not provide any support for Mr. Parks' proposed investment allocation; and

-- the prudent investor rate has no relevance to the valuation of the Pension Claims; and

(7) showing that the FSDs were not procured through a violation of the automatic stay because:

-- the Pensions Regulator focused on the Pension Schemes' financial condition prior to the Petition Date;

-- issuance of the FSDs does not implicate the automatic stay;

-- the Debtors did not then, and do not now, contend that issuance of the FSDs constitutes a violation of the automatic stay;

-- the SCL Committee's awareness of, and involvement in the FSD process; and

-- the SCSL Committee's actions before the Pensions Regulator were necessitated by the Debtors' opposition to the FSDs.

SCL Committee Still Not Convinced on Pension Settlement's Approval

In its post-trial submission, the SCL Committee argues that the Settlement Amount assumes a statutory entitlement that does not, and may not exist, and that it was calculated using improper methodology by an interested party.

The SCL Committee also asserts, among other things, that:

(1) the Pension Trustees' contribution demands do not trigger a present Section 75 buy-out liability, and are invalid in any event;

(2) Mr. Hosegood did not employ the methodology required by Section 75 and Regulation 5(12) of the Occupational Pension Schemes Regulations 2008 in calculating the buy-out debt;

(3) even under English law, the Court is not bound by Mr. Hosegood's calculation of the Section 75 buy-out debt, and is free to consider the work of other actuaries in determining the Pension Claims;

(3) allowing the Pension Schemes to establish the quantum of the Pension Claims through their own actuary violates U.S. policy;

(4) where no Section 75 debt has been triggered, and the services agreement between SCL and SCSL, does not provide an indemnity for a Section 75 debt, the actual damage measure -- as calculated on the technical provisions or under the prudent investor rule -- is the proper measure of the Pension Claims;

(5) if English law applies, Mr. Hosegood's calculation on the technical provisions is the proper measure of the scheme deficit;

(7) the Pension Claims arise, and may be allowed only against Sea Containers Services, Limited;

(8) the FSDs were procured and issued in violation of the automatic stay, and should not be accorded comity;

(9) the Pension Settlement's treatment of the Pension Schemes' expenses as administrative costs is unreasonable;

(10) the Pension Settlement's proposed process for resolving the purported equalization claim is inappropriate, and the equalization reserve is unreasonable;

(11) the Pension Settlement must be rejected as a sub rosa plan of reorganization; and

(12) the Pension Settlement's common-currency term restricts the plan, and violates the sub rosa rule.

SCL Committee Ignores Court's Directions

At the close of the hearing held May 29, 2008, to consider the approval of the Pension Settlement, parties were instructed to submit "abbreviated" post-trial submissions, which were to comprise basically of citations to the record that support the various points they want to highlight to the Court.

In response to a question by counsel for the Debtors as to whether the Court envisioned the submissions taking the form of a "suggested set of findings and conclusions," the Court clarified that the submissions should "not even [be] that formal," though "more like that than a legal brief."

The Debtors' counsel, Yosef Riemer, Esq., at Kirkland Ellis LLP, confirmed to the Court that the parties had obtained a copy of the post-trial submission in the New Century bankruptcy case to which the Court referred, and had agreed to submit their post-trial submissions based on the New Century model on June 27. No party objected to Mr. Riemer's statement.

In compliance with the Court's direction, the SCSL Committee and the Debtors filed their post-trial submissions based on the New Century model, relates David B. Stratton, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware. The SCL Committee, however, filed a "formal legal brief that contained substantive legal arguments and citations to case law," Mr. Stratton says.

Although the SCSL Committee does not believe that the SCL Committee's post-trial brief will have any impact on the outcome of the Settlement Request, the extent to which the SCL Committee has completely and unfairly disregarded the Court's directions compels the SCSL Committee to bring the matter to Judge Carey's attention, Mr. Stratton points out.

Mr. Stratton asserts that the SCSL Committee fully recognizes that the added cost and delay of additional briefing at this late stage would very likely outweigh any marginal benefit to the Court. Therefore, the SCSL Committee tells the Court, it is not seeking an opportunity to submit a response to the SCL Committee's post-trial brief.

"The [SCSL] Committee is confident that the Court will even the playing field by disregarding arguments to which the [SCSL] Committee has not had the opportunity to respond," Mr. Stratton says.

About Sea Containers

Based in Hamilton, Bermuda, Sea Containers Ltd. --http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda,the company has regional operating offices in London, Genoa, NewYork, Rio de Janeiro, Sydney, and Singapore. The company isowned almost entirely by United States shareholders and itsprimary listing is on the New York Stock Exchange (SCRA andSCRB) since 1974. On Oct. 3, the company's common shares andsenior notes were suspended from trading on the NYSE and NYSEArca after the company's failure to file its 2005 annual reporton Form 10-K and its quarterly reports on Form 10-Q during 2006with the U.S. Securities and Exchange Commission.

Through its GNER subsidiary, Sea Containers Passenger Transportoperates Britain's fastest railway, the Great North EasternRailway, linking England and Scotland. It also conducts ferryoperations, serving Finland and Estonia as well as a commuterservice between New York and New Jersey in the U.S.Sea Containers Ltd. and two subsidiaries filed for chapter 11protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., atYoung, Conaway, Stargatt & Taylor, represent the Debtors intheir restructuring efforts.

The Official Committee of Unsecured Creditors and the FinancialMembers Sub-Committee of the Official Committee of UnsecuredCreditors of Sea Containers Ltd. is represented by William H.Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'sOfficial Committee of Unsecured Creditors is represented byattorneys at Willkie Farr & Gallagher LLP.

SHOE PAVILION: Files for Chapter 11 Protection in California------------------------------------------------------------Shoe Pavilion, Inc. and its wholly-owned subsidiary, Shoe Pavilion Corporation, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Central District of California.

Christopher Scinta of Bloomberg News, citing papers filed with the Court, says Shoe Pavilion listed assets of $61,000,000 and debts of $27,000,000. Shoe Pavilion traded 16.5 cents on July 16, 2008, New York time in Nasdaq Stock Market, giving the company a market value of $1,570,000, he notes.

According to the company's regulatory filing with the Securities and Exchange Commission, the Debtors will continue to operate their business as "debtor-in-possession" under the jurisdiction of the Court.

On June 19, 2008, Shoe Pavilion received a written notice from The Nasdaq Stock Market indicating that the company fails to comply with the minimum bid price requirement for continued listing on the Nasdaq Global Market because the bid price of its common stock has closed below the Nasdaq minimum bid price listing requirement of $1.00 per share for 30 consecutive business days. The company has until Dec. 16, 2008, to regain compliance with the Nasdaq minimum bid price requirement.

Shoe Pavilion reported total assets of $60,994,000 and totaldebts of $42,180,000, for the quarter period ended March 29, 2008.

SPRINT NEXTEL: In Initial Talks with SK Telecom on Joint Venture----------------------------------------------------------------Sprint Nextel Corp. and SK Telecom Co. Ltd. are in preliminary discussion to create a strategic partnership aimed to develop new handsets and services, The Wall Street Journal says.

WSJ, citing people familiar with the matter, states, the companies have considered the idea of SK Telecom making a minority investment in Sprint, but they aren't discussing an outright merger. Last fall, Sprint rejected a $5 billion investment offer by SK Telecom and Providence Equity Partners, The Journal indicates.

Any investment, according to WSJ, resulting from the current talks would likely be smaller. WSJ adds that Sprint has a market capitalization of $26 billion, about double of SK Telecom's market capitalization of $13.8 billion.

The strategic-partnership negotiations are at an early stage and may not result in any agreements between the companies, WSJ said quoting one of the people.

WSJ relates that Sprint shares soared in July 14 afternoon trading after a CNBC report said SK Telecom was in talks to buy Sprint. Shares closed up 9.4% at $9.04 in 4 p.m. trading on the New York Stock Exchange, WSJ adds.

About SK Telecom Co. Ltd.

Based in Seoul, South Korea, SK Telecom Co. Ltd. (SEO:017670) -- http://www.sktelecom.com/-- is a wireless telecommunications services provider. The company had approximately 22 million subscribers as of Dec. 31, 2007. SK Telecom provides services, including cellular voice services; wireless data services, and digital convergence and new businesses. The company provides wireless voice transmission services to its subscribers through its cellular networks and also offers wireless global roaming services though service agreements with various foreign wireless telecommunications service providers. SK Telecom also provides wireless data transmission services, including wireless Internet access services, which allow subscribers to access a range of online digital contents and services, well as to send and receive text and multimedia messages, using their mobile phones.

About Sprint Nextel

Sprint Nextel Corp. -- http://www.sprint.com/-- offers a comprehensive range of wireless and wireline communicationsservices bringing the freedom of mobility to consumers, businessesand government users. Sprint Nextel is widely recognized fordeveloping, engineering and deploying innovative technologies,including two robust wireless networks serving about 54 millioncustomers at the end of the fourth quarter 2007; industry-leadingmobile data services; instant national and international walkie-talkie capabilities; and a global Tier 1 Internet backbone.

* * *

As reported in the Troubled Company Reporter on May 2, 2008,Standard & Poor's Rating Services lowered its corporate credit andsenior unsecured ratings on Sprint Nextel Corp. to 'BB' from'BBB-' and removed the ratings from CreditWatch with negativeimplications. The outlook is stable.

TORRENT ENERGY: Gets Final Okay to Access YA Global's $4.5MM Loan-----------------------------------------------------------------The Hon. Elizabeth Perris of the U.S. Bankruptcy Court for theDistrict of Oregon authorized Torrent Energy Corp. and its debtor-affiliates to obtain, on a final basis, up to $4.5 million indebtor-in-possession financing from YA Global Investment LP, aslender.

As reported in the Troubled Company Reporter on June 11, 2008, the Debtors were permitted to borrow up to $1.34 million, on the interim. The proceeds of the loan will be used for working capital purposes -- including payment of professional services fees, salaries, and operating expenses. Furthermore, the proceeds will also be used to pay the promissory note issued by the Debtors to lender on May 15, 2008, in the amount of $207,854 plus accrued interest, payment of certain subsidiary debt, and other purposes, as approved by lender.

The facility will bear interest at 12% per annum.

According to court documents, the DIP facility is subject to carve-outs for payments to professional advisors to the Debtors or the committee, and fees required to be paid to the U.S. Trustee and clerk of the Bankruptcy Court. There is a $250,000 carve-out for payments of fees and expenses incurred by professional advisors retained by the Debtors or the committee.

To secure the Debtors' DIP obligations, the lender will be granted a lien on substantially all of the Debtors' assets. The liens will have priority and senior secured status over all other claims and interests.

The DIP lien contains customary and appropriate events of defaults. Failure to confirm a plan of reorganization is an event of default. As reported in the Troubled Company Reporter on July 9, 2008, the Debtor submitted to the Court a Chapter 11 plan of reorganization and a disclosure statement explaining that plan. The Plan is expected to include a rights offering, under which the shareholders of the Debtors will have the opportunity to purchase a minimum of $2 million of additional new equity, subject to Bankruptcy Court approval and other conditions.

As reported in the Troubled Company Reporter on June 5, 2008, theDebtors are party to an investment agreement, dated as of June28, 2006, with YA Global, formerly Cornell Capital Partners, L.P.Under the agreement, the Debtors issued to YA Global 25,000 sharesof Series E Convertible Preferred Stock.

According to the Debtors' regulatory filing with the Securities and Exchange Commission, on July 1, 2008, the Debtors failed to make a mandatory redemption payment required under the terms of the investment agreement, upon which YA Global may require the Debtors to redeem all or any portion of their preferred stock.

About Torrent Energy

Headquartered in Portland, Oregon, Torrent Energy Corporation fkaiRV Inc. -- http://www.torrentenergy.com/-- engages in natural gas exploration. The company and two of its affiliates filed forChapter 11 protection on June 2, 2008 (Bankr. D. Ore Led CaseNo.08-32638 through 08-32640). Jeanette L. Thomas, Esq., at Perkins Coie LLP, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 18 has not appointed creditors to serve on an Official Committee of Unsecured Creditors.

The Debtors' consolidated balance sheets listed total assets of$35,955,866 and total debts of $23,073,091 for the quarterlyperiod ended Dec. 31, 2007.

All these ratings had been on CreditWatch with negative implications since Feb. 13, 2008. S&P had lowered all of these ratings by four notches on July 3, 2008.

"The speculative-grade ratings reflected the tremendous uncertainty regarding Triad's ultimate paid claims," explained Standard & Poor's credit analyst James Brender. "Significant operating losses in 2008 and 2009 will deplete a material portion of Triad's capital base, but S&P believe Triad will be able to satisfy its policyholder obligations. The holding company faces some liquidity risk, but S&P expect that Triad's ending book value will be significantly greater than its outstanding debt."

The uncertainty in S&P's forecast stems from both macroeconomic conditions and some issues specific to Triad. The S&P Case-Shiller 20-city composite has declined 17.8% since its peak in July 2006, and it believe it will fall further. Unemployment is also a concern. The unemployment rate jumped to 5.5% in May. Since April 2008, S&P's forecasts for all mortgage insurers assume a rise in the unemployment rate to almost 6% by 2009, but unemployment above that level would probably result in more claims for mortgage insurance than it anticipate.

Triad's insured loan portfolio contains a low percentage of borrowers with credit scores below 620, but it also features exposure to untested mortgage products. If actual claim rates are even moderately greater than S&P's expectations, there is a material probability that Triad will be unable to pay its claims.

The resolution of a disputed reinsurance treaty will have a material impact on Triad's claims-paying resources. The coverage of $95 million becomes available if Triad's combined ratio exceeds 100% and its risk-to-capital ratio is above 25%. Both conditions were satisfied at the end of the first quarter, but the reinsurer declared the treaty terminated because of an alleged covenant violation by Triad. The parties have submitted the matter for arbitration. The present value of the treaty is about $80 million because Triad would have to make some future premium payments to receive payment for reinsured losses.

Standard & Poor's cannot determine the likely outcome from the arbitration. In S&P's base case, Triad's ending statutory capital would be $363 million if it receives the full amount of coverage. Alternatively, the company's capitalization would only be $283 million if it receives nothing for the treaty.

Triad's competitive position, management, operating performance, and enterprise risk management were not important factors in our rating actions on July 3, 2008, because S&P viewed the company as being in run-off. Management has limited options for influencing Triad's ability to pay its claims with the important exception of loss mitigation. Triad needs to either maintain adequate personnel for loss mitigation and premium collection functions or outsource those operations.

U.S. Shipping Partners L.P. (NYSE: USS) -- http://www.usslp.com/-- is a leading provider of long-haul marine transportationservices, principally for refined petroleum products,petrochemical and commodity chemical products, in the U.S.domestic "coastwise" trade. The partnership's existing fleetconsists of eleven tank vessels: six integrated tug barge units;one product tanker; three chemical parcel tankers and one ATB thatwas delivered in June 2007 and entered service in July 2007.

At March 31, 2008, the partnership's consolidated balance sheetshowed $707.2 million in total assets, $544.8 million in totalliabilities, $50.9 million in noncontrolling interest in jointventure, and $111.5 million in total partners' capital.

* * *

As reported in the Troubled Company Reporter on May 15, 2008,Moody's Investors Service lowered its debt ratings of U.S.Shipping Partners L.P. -- Corporate Family and Probability ofDefault, each to Caa3 from Caa1, senior secured to Caa2 from B3and second lien senior secured to Ca from Caa3. The ratingoutlook is negative.

VERTIS INC: Moody's Assigns Default Rating after Bankruptcy Filing-----------------------------------------------------------------Moody's Investors Service has downgraded Vertis, Inc's. Probability of Default rating to D from Ca , following the company's statement that it has filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code, accompanied by a pre-packaged plan of reorganization, the terms and conditions of which have been accepted by its noteholders. Moody's plans to withdraw all of Vertis's ratings shortly.

Headquartered in Baltimore, Maryland, Vertis Inc. is a leading provider of integrated advertising products and marketing services. The company recorded fiscal 2007 revenues of $1,365 million.

WHITEHALL JEWELERS: Court OKs Auction, Except on Break-Up Fee Term------------------------------------------------------------------The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware approved the bidding procedures proposed by Whitehall Jewelers Holdings Inc. and its debtor-affiliates except on the part regarding the break-up fee, The Deal's Jamie Mason writes, citing Moses & Singer LLP, counsel to the Official Committee of Unsecured Creditors.

The Troubled Company Reporter said on July 1, 2008, that the Debtors requested the Court, among others, for authority to enter into an asset purchase agreement with Great American Group LLC, Hudson Capital Partners LLC and Silverman Jeweler Consultants Inc.; and to approve payment of a break-up fee of $940,000 payable from the proceeds of a sale to or conducted by a competing bidder.

Judge Gross found that the break-up fee wasn't set as an appropriate administrative expense and is not in the best interest of the estate, Mr. Kolod said, The Deal relates.

The stalking horse bidder group may not participate in the auction after the break-up was denied, The Deal quotes Mr. Kolod as stating.

The stalking horse bidders had agreed to pay the Debtors 55.5% of inventory valued between $169 million and $177 million, The Deal notes. Should the inventory's value fall between $138 million and $145 million, the stalking horse bidders will pay 53.5%, The Deal adds. With these agreement, the Debtors could get around $73.8 million to $98.2 million, The Deal suggests.

The Committee said that the sale process won't maximize the value of the assets saying the sale is forced, The Deal notes. The Committee also asserted that the sale schedule is "unreasonably truncated," The Deal relates.

Accord to The Deal, Mr. Kolod doesn't know whether the Debtor will look for another stalking horse bidder.

Judge Gross scheduled the public sale for July 31, 2008, at 11:00 a.m. at the offices of Proskauer Rose LLP. A sale hearing is slated for Aug. 8, 2008, at 10:00 a.m. Objections to the sale are due Aug. 6, 2008, at 10:00 a.m. Bids are due either on July 27 or July 28, 2008. Due to the denial of the break-up fee, the initially set minimum bid of at least 2% higher than the stalking horse offered is canceled.

Consigned Goods

The Deal states that the disposal of the Debtor's $63 million consigned items has not been resolved yet. Judge Gross will decide on this matter at a July 24 hearing, according to a court document. Mr. Kolod said that Judge Gross allowed the Debtor to proceed with the sale amid uncertainties on the consignment good, The Deal notes.

About Whitehall Jewelers

Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings,Inc. -- http://www.whitehalljewellers.com/-- own and operate 375 stores jewelry stores in 39 states. Whitehall is owned by hedge funds Prentice Capital Management and Millennium Partners LP, both of New York, and Holtzman Opportunity Fund LP of Wilkes-Barre, Pa. The company operates stores in regional and regional shopping malls under the names Whitehall and Lundstrom. The Debtors' retail stores operate under the names Whitehall (271 locations), Lundstrom (24 locations), Friedman's (56 locations, and Crescent (22 locations). As of June 23, 2008, the Debtors have about 2,852 workers.

When the Debtors' filed for protection against their creditors,they listed total assets of total assets of $207,100,000 and totaldebts of $185,400,000.

WYOMING ETHANOL: Wants to Tap Standard Bank's $10.1 Mil. DIP Fund-----------------------------------------------------------------Wyoming Ethanol LLC and its debtor-affiliates last week asked permission from the U.S. Bankruptcy Court for the District of Wyoming in Cheyenne to access $10.1 million of its proposed $24 million debtor-in-possession facility from Standard Bank Plc.

The Debtor also asked the Court's interim permission to use lenders' cash collateral.

The DIP facility's interest rate would be added 200 basis points upon an event of default. It also carries 1% upfront commitment fee, 1% unused line fee, and 1% closing fee on the $24 million loan amount, The Deal's Terry Brennan states.

No final hearing on the DIP facility has been set.

Prepetition Capitalization

On June 28, 2007, the Debtors entered into a certain credit agreement with the lenders and Standard Bank as prepetition line of credit issuer, lead arranger and administrative agent. Pursuant to the credit agreement, the prepetition lenders will provide to the Debtors a revolving facility in the maximum principal amount of $2.8 million and a term loan in the maximum principal amount of $37.2 million. The Debtors' obligations to the prepetition lenders under the credit facilities are secured by: (a) substantially all of their personal property; (b) a mortgage on REID's ground lease; (c) a mortgage on the Renova Energy Inc. parcel; (d) a mortgage on the real property on which Wyoming Ethanol's ethanol facility is located; (e) Renova UK's equity interests in REI; and (f) an assignment of agreements, plans and permits by REI and REID.

As of the petition date, the loan balance under the credit agreement was about $28 million with a further $1.5 million drawn under the revolving credit facility.

The Debtors own certain assets not encumbered by the prepetition lenders' liens, including (i) real property located in Fountain, co-owned by REI, (ii) 85 acres of land adjacent to the Wyoming Facility owned by Wyoming Ethanol, and (iii) REI's 3% membership interest in Bridgeport Ethanol LLC. The estimated value of these assets is about $750,000. These assets will serve as additional security for the proposed postpetition financing.

Renova UK guaranteed, among other things, all of the principal and interest on the loans made to the Debtors under the credit agreement, and all of the other Obligations.

Objections to DIP Facility

The U.S. Trustee Charles McVay said that under the Debtor's interim DIP motion, unsecured creditors will shoulder payment of loans owed to prepetition lenders, The Deal notes. Mr. McVay said that other creditors' claims get wiped out through awarding Standard Bank superpriority status under the DIP agreement, The Deal says, citing court documents.

Creditor TIC-The Industrial Co. Wyoming Inc., which asserted $476,850 in unsecured claim, claimed that unsecured creditors expecting payment will be paid with nothing under the DIP agreement, The Deal relates. TIC added that the Debtor does not require the DIP fund. The DIP facility "will eliminate the recovery of unsecured creditors in the the opening weeks of [the case] before a [creditors'] committee is even formed, TIC maintained, The Deal says.

About Wyoming Ethanol

Wyoming Ethanol, LLC, Renova Energy (ID), LLC, and Renova Energy,Inc., the U.S.-based subsidiaries of Renova Energy plc,manufacture ethyl and ethanol alcohol. Wyoming Ethanol owns and operates an ethanol plant in Torrington, Wyoming and REID owns a partially completed ethanol plant in Heyburn, Idaho. The Debtor and its affiliates filed separate chapter 11 bankruptcy petitions before the June 19, 2008 (Bankr. D. Wyo. Lead Case No. 08-20345). Paul Hunter, Esq., in Cheyenne, and Thomas R. Califano, Esq., and Vincent J. Roldan, Esq., at DLA Pipers US LLP represent the Debtors. Wyoming Ethanol, LLC disclosed $10 million to $50 million in estimated assets and $10 million to $50 million in debts when it filed for bankruptcy.

Renova Energy plc (RVA: AIM) -- http://www.renovaenergy.com/-- is a U.K.-based renewable fuel company investing in a wellestablished integrated ethanol marketing, distribution andproduction business in the Rocky Mountain and Northwest regions ofthe USA. The company was admitted to trading on AIM, part of theLondon Stock Exchange, in June 2005. Renova Energy Plc is a non-bankrupt entity.

WYOMING ETHANOL: Unit May Use DIP Fund to Finish Idaho Plant------------------------------------------------------------Renova Energy (ID) LLC, debtor-affiliate of Wyoming Ethanol LLC, obtained permission from the U.S. Bankruptcy Court for the District of Wyoming in Cheyenne to borrow from Indiana E85 Distribution Co., LLC an amount not to exceed $25,000 under an Idaho debtor-in-possession facility agreement. Upon entry of a final order, REID is authorized to borrow from the lender an amount not to exceed $250,000.

REID told the Court that its Idaho plant is merely 75% complete. Because of the the incomplete nature of its Idaho plant, unfavorable credit market conditions, and current problems in the ethanol industry, REID said it has been unable to obtain alternative financing.

The Court has set a final hearing on the Idaho DIP facility motion for July 21, 2008. Objections are due July 17, 2008.

About Wyoming Ethanol

Wyoming Ethanol, LLC, Renova Energy (ID), LLC, and Renova Energy,Inc., the U.S.-based subsidiaries of Renova Energy plc,manufacture ethyl and ethanol alcohol. Wyoming Ethanol owns and operates an ethanol plant in Torrington, Wyoming and REID owns a partially completed ethanol plant in Heyburn, Idaho. The Debtor and its affiliates filed separate chapter 11 bankruptcy petitions before the June 19, 2008 (Bankr. D. Wyo. Lead Case No. 08-20345). Paul Hunter, Esq., in Cheyenne, and Thomas R. Califano, Esq., and Vincent J. Roldan, Esq., at DLA Pipers US LLP represent the Debtors. Wyoming Ethanol, LLC disclosed $10 million to $50 million in estimated assets and $10 million to $50 million in debts when it filed for bankruptcy.

Renova Energy plc (RVA: AIM) -- http://www.renovaenergy.com/-- is a U.K.-based renewable fuel company investing in a wellestablished integrated ethanol marketing, distribution andproduction business in the Rocky Mountain and Northwest regions ofthe USA. The company was admitted to trading on AIM, part of theLondon Stock Exchange, in June 2005. Renova Energy Plc is a non-bankrupt entity.

WYOMING ETHANOL: Disclosure Statement Hearing Reset to August 13----------------------------------------------------------------Judge Peter McNiff of the U.S. Bankruptcy Court for the District of Wyoming in Cheyenne moved a hearing to consider the adequacy of Wyoming Ethanol LLC's disclosure statement from July 8, 2008, to Aug. 13, 2008 in order to hear the Debtor's debtor-in-possession facility motion, The Deal's Terry Brennan writes.

A separate story on the DIP facility is in today's copy of the Troubled Company Reporter.

Treatment of Claims

The plan provides for the transfer of assets relating to the Renova Energy (ID) LLC's incomplete ethanol plant in Idaho to reduce claims against Renova Energy Inc. The plan also provides for the restructuring of of REI's and Wyoming Ethanol's financial affairs.

Supporting lenders will receive restructured senior secured debt obligations of the reorganized Debtors. Holders of other secured claims, which the Debtors estimate to be negligible, will either be paid in full, be given collateral, or be provided other treatment as may be agreed.

The secured claims of mechanic lienholders against REI parcel will be unimpaired under the plan.

An amount of cash will be provided under the plan for unsecured critical vendors. The Debtors believe the cash will provide a full recovery for the unsecured critical vendors.

Claims of general unsecured creditors, expected to be negligible, will be discharged under the plan for no consideration. There will be no distribution for shareholders as well.

The Deal relates that the Debtor filed its bankruptcy plan and accompanying disclosure statement on June 25, 2008. Under the plan, The Deal says that Standard Bank would gain ownership under a debt-for-equity swap. Unsecured Creditors won't get anything under the plan, The Deal adds.

About Wyoming Ethanol

Wyoming Ethanol, LLC, Renova Energy (ID), LLC, and Renova Energy,Inc., the U.S.-based subsidiaries of Renova Energy plc,manufacture ethyl and ethanol alcohol. Wyoming Ethanol owns and operates an ethanol plant in Torrington, Wyoming and REID owns a partially completed ethanol plant in Heyburn, Idaho. The Debtor and its affiliates filed separate chapter 11 bankruptcy petitions before the June 19, 2008 (Bankr. D. Wyo. Lead Case No. 08-20345). Paul Hunter, Esq., in Cheyenne, and Thomas R. Califano, Esq., and Vincent J. Roldan, Esq., at DLA Pipers US LLP represent the Debtors. Wyoming Ethanol, LLC disclosed $10 million to $50 million in estimated assets and $10 million to $50 million in debts when it filed for bankruptcy.

Renova Energy plc (RVA: AIM) -- http://www.renovaenergy.com/-- is a U.K.-based renewable fuel company investing in a wellestablished integrated ethanol marketing, distribution andproduction business in the Rocky Mountain and Northwest regions ofthe USA. The company was admitted to trading on AIM, part of theLondon Stock Exchange, in June 2005. Renova Energy Plc is a non-bankrupt entity.

WYOMING ETHANOL: Section 341(a) Meeting Slated for July 29----------------------------------------------------------The United States Trustee for Region 19 fixed a meeting of creditors of Wyoming Ethanol LLC and its debtor-affiliates at 10:00 a.m., on July 29, 2008, at 308 West 21st Street, Second Floor in Cheyenne, Wyoming.

This is the first meeting of creditors required under Section341(a) of the Bankruptcy Code in all bankruptcy cases.

All creditors are invited, but not required, to attend. ThisMeeting of Creditors offers the one opportunity in a bankruptcyproceeding for creditors to question a responsible office of theDebtor under oath about the company's financial affairs andoperations that would be of interest to the general body ofcreditors.

About Wyoming Ethanol

Wyoming Ethanol, LLC, Renova Energy (ID), LLC, and Renova Energy,Inc., the U.S.-based subsidiaries of Renova Energy plc,manufacture ethyl and ethanol alcohol. Wyoming Ethanol owns and operates an ethanol plant in Torrington, Wyoming and REID owns a partially completed ethanol plant in Heyburn, Idaho. The Debtor and its affiliates filed separate chapter 11 bankruptcy petitions before the June 19, 2008 (Bankr. D. Wyo. Lead Case No. 08-20345). Paul Hunter, Esq., in Cheyenne, and Thomas R. Califano, Esq., and Vincent J. Roldan, Esq., at DLA Pipers US LLP represent the Debtors. Wyoming Ethanol, LLC disclosed $10 million to $50 million in estimated assets and $10 million to $50 million in debts when it filed for bankruptcy.

Renova Energy plc (RVA: AIM) -- http://www.renovaenergy.com/-- is a U.K.-based renewable fuel company investing in a wellestablished integrated ethanol marketing, distribution andproduction business in the Rocky Mountain and Northwest regions ofthe USA. The company was admitted to trading on AIM, part of theLondon Stock Exchange, in June 2005. Renova Energy Plc is a non-bankrupt entity.

The Debtor's operations ceased on May 28, 2008, and the trustee did not carry on any aspects of the business.

The trustee reported on the various assets of the Debtor. Other assets of the Debtor consist of certain intellectual property, including trademarks, a Web site, various telephone numbers and a client list.

The inventory consists of about 6,000 active files and customer lists. The trustee said it was not in a position to estimate any value to these assets.

The company had only used office furniture and computers with little value. The trustee determined that the cost of realization would exceed the value of these assets and abandoned them. The trustee confirmed the value of these assets with Infinity Assets, a licensed auction and appraisal company.

The company operated out of leased premises in nine locations in Canada, except Unionville and Oshawa locations. The principal of the company owns the buildings at the Unionville and Oshawa locations. As there were no operating funds, the trustee disclaimed all leases and shortly after, the company filed for bankruptcy.

At December 2007, outstanding receivables were stated at book value of C$274,264. However, the trustee understands that some of the accounts were collected prior to the date of bankruptcy. The trustee is reviewing company records and determining any outstanding receivables as of the date of bankruptcy.

The trustee received C$18,000 cash from a bank account at the date of bankruptcy. The trustee has sent letters to various banks requesting an update with respect to the accounts and to have all funds forwarded to the trustee. The trustee understands that the bank accounts were being operated on lines of credits.

On June 6, 2008, the trustee submitted an advertisement in local newspapers requesting interested parties to submit bids for the X-Copper assets by July 4, 2008. The trustee initiated an expedited sale process in order to retain the value of the assets.

The trustee has compiled a sales package for interested bidders and has distributed the sales packages to a number of parties. There has been considerable interest in purchasing the business of X-Copper, the trustee reported.

The Troubled Company Reporter related on July 7, 2008, that when X-Copper declared bankruptcy at the end of May 2008, several thousand clients found themselves suddenly without legalservices. Many of those clients had paid for legal services inadvance and had no warning that the company was going to defaulton those services. As Ontario's regulator of legal services, the Law Society of Upper Canada will investigate the circumstances that led to the company's bankruptcy. The investigation will allow it to determine if any disciplinary action is warranted.

About X-Copper

Headquartered in Ontario, Canada, X-Copper Services Inc. --http://www.xcopper.com/-- is a paralegal firm specializing in fighting traffic tickets. The company has offices in Toronto,Barrie and Ottawa.

* Fitch Says Fuel Prices Draining US Airline Industry's Liquidity-----------------------------------------------------------------Liquidity and credit quality are again at the forefront as the critical determinants of the U.S. airline industry's economic viability, according to Fitch Ratings.

The sheer magnitude of increasing energy prices and resulting weak cash flows make further industry consolidation unworkable. Indeed, the mechanism for industry capacity rationalization is now financial distress and carrier liquidation as opposed to merger and acquisition activity. Over the second half of 2008, more forced take-out of domestic capacity is likely as ongoing fuel cost pressures drain liquidity to distressed levels at all but the most cash-rich carriers.

Fitch expects that all of the U.S. legacy carriers will experience rapid erosion of cash levels in the post-Labor Day period. This erosion could threaten their survival if adverse fuel trends continue, and multiple bankruptcies and liquidations are increasingly likely looking ahead to 2009.

'The U.S. industry's current structure is unsustainable in the current fuel environment,' said William Warlick, Senior Director, Fitch Ratings.

As the airlines begin reporting uniformly weak Q2 results, fixed-income investors should pay close attention to the cash-raising options still available to the legacy carriers. Also key will be management's candor with respect to the viability of various liquidity-enhancing options.

Fitch Ratings' 'Airline Credit Navigator' is a periodic report designed to provide investors with a summary of key airline industry credit and operating trends, recent industry financial developments, liquidity, cash flow, fleet plans and financing activity. Key credit and operating trends for each of the major U.S. airlines are provided in the report. This edition seeks to provide investors insight into longer-term trends in the context of the upcoming earnings season.

The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given its current projected losses as stated in "Projected Losses For U.S. Alt-A RMBS Issued In First Half 2007," published May 28, 2008, and "S&P Provides Projected Losses For U.S. Alt-A RMBS Issued In 2006," published April 29, 2008, on RatingsDirect. S&P arrived at its estimated projected losses for the Alt-A RMBS deals using the analysis outlined in "Standard & Poor's Revised Default And Loss Curves For U.S. Alt-A RMBS Transactions," published Dec. 19, 2007, on RatingsDirect.

This article describes the approach S&P used to develop a forward-looking default curve. Using each transaction's current level of loans in foreclosure, S&P apply the periodic growth rates derived from the curve to project future foreclosures. At each point in time, S&P take a percentage of the foreclosures as losses and assume a loss severity depending on the type of collateral in the transactions.

For this analysis, S&P assumed a loss severity of 34% for U.S. Alt-A RMBS transactions backed by fixed-rate loans and long-reset hybrid collateral (loans with fixed-rate periods of at least five years); S&P assumed a loss severity of 35% for transactions backed by mortgage loans that have a negative amortization feature; and S&P assumed a loss severity of 35% for transactions secured by adjustable-rate collateral and short-reset hybrid collateral (loans with fixed-rate periods under five years).

Additionally, S&P assumed that the loans that are currently classified as real estate owned will be liquidated over the next eight months. S&P estimated the lifetime projected losses by adding these losses to the actual losses that the transactions have experienced to date. As part of its analysis, S&P considered the characteristics of the underlying mortgage collateral as well as macroeconomic influences. For example, the risk profile of the underlying mortgage pools influences our default projections, while the outlook for housing price appreciation and the health of the housing market influences its loss severity assumptions.

The lowered ratings reflect our assessment of credit support under three constant prepayment rate scenarios. The first scenario utilizes the lower of the lifetime or the 12-month CPR. The second utilizes a CPR of 6.00%, which is very slow by historical standards. The third scenario uses a CPR that is double the CPR used in the first scenario. This allows us to see how the transactions would be affected in different CPR environments. S&P assumed a constant default rate for each pool. Because S&P's analysis focused on each individual class with varying maturities, prepayment scenarios may cause an individual class or the transaction itself to prepay in full before it incurs the entire loss projection. Slower prepayment assumptions lengthen the average life of the mortgage pool, which increases the likelihood that total projected losses will be realized. The longer a class remains outstanding, however, the more excess spread it generates.

S&P took into account the paydown of each class when evaluating the ratings. For example, if a senior class is scheduled to pay down in the next 15 months, S&P only allocated 15 months of losses in the analysis of that class. Additionally, if the transactions utilized excess spread as a form of credit enhancement, S&P only allocated 15 months of excess spread.

To assess the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base-case assumption S&P assumed in its analysis.

For example, a class may have to withstand 115% of our base-case loss assumption in order to maintain a 'BB' rating, while a different class may have to withstand 125% of S&P's base-case loss assumption to maintain a 'BBB' rating. S&P affirmed a rating at 'AAA' if the rating can withstand approximately 150% of its base-case loss assumptions under its analysis, subject to individual caps and qualitative factors assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 85% of the current pool balances.

S&P lowered its rating on class 2-A-1C from HarborView Mortgage Loan Trust 2007-2 and placed it on CreditWatch with negative implications due to the downgrade and placement of the 'AA' rating on Ambac Assurance Corp., the insurance provider for this bond, on CreditWatch negative. The transaction has insufficient inherent credit support to maintain this bond at the 'AAA' rating level.

To date, including the classes listed below and actions on both publicly and confidentially rated classes, S&P have resolved the CreditWatch placements of the ratings on 268 classes from 51 U.S. RMBS Alt-A transactions from the 2006 and 2007 vintages. Currently, S&P's ratings on 786 classes from 112 U.S. RMBS Alt-A transactions from the 2006 and 2007 vintages are on CreditWatch negative.

* S&P Puts Default Ratings on 40 Note Classes from Five CDOs------------------------------------------------------------Standard & Poor's Ratings Services lowered its ratings to 'D' on 40 classes of notes from five collateralized debt obligation transactions--ACA ABS 2007-2 Ltd., Bonifacius Ltd., Hartshorne CDO I Ltd., Lancer Funding II Ltd., and Tricadia CDO 2006-7 Ltd.--following the liquidation of the transactions' portfolio collateral. Six of the lowered ratings were on CreditWatch negative before the downgrades.

ACA ABS 2007-2 and Hartshorne CDO I Ltd. are both hybrid CDOs backed predominantly by mezzanine residential mortgage backed securities; Lancer Funding II Ltd. and Tricadia CDO 2006-7 Ltd. are both hybrid CDOs of structured CDOs; and Bonifacius Ltd. is a cash flow CDO backed predominantly by high-grade RMBS securities. The deals had previously experienced events of default, and subsequently the controlling noteholders had voted to accelerate the maturity of the notes and liquidate the collateral assets.

The downgrades follow notice from the trustees that the liquidation of the portfolio assets is complete and the available proceeds have been distributed to the noteholders. The trustees have indicated that the proceeds of the liquidations were insufficient to pay down the balances of any of the notes from the five affected transactions in full.

"Despite Alabama's limited revenue-raising flexibility, we expect the state will make necessary adjustments through proration in mid-fiscal 2009 should sales and income tax projections prove too optimistic," said Standard & Poor's credit analyst Sussan Corson. "Furthermore, we expect that, while higher oil and gas prices could continue to pressure sales tax growth and the automobile manufacturers, in the near term higher mineral prices should benefit oil and gas revenue that flows into the state's general fund," Ms. Corson added.

The report discusses in detail the factors supporting the 'AA' general obligation debt rating on Alabama, including its large and diversifying economic base, dedicated revenue streams for capital projects and debt service, and low GO debt burden.

Alabama's economy is anchored by several regional economic centers, including Huntsville, Birmingham, Mobile, and the state capital, Montgomery. In the past several years, the state has experienced economic development spurred by the automotive industry, with 18% of total manufacturing jobs in transportation equipment manufacturing. Alabama's economic base has diversified in the past decade with growth in high-tech and defense-related industries in the Huntsville area and health care and business services in the Birmingham and Mobile metropolitan statistical areas.

* U.S. SEC's Emergency Order on Naked Short Selling Starts July 21------------------------------------------------------------------The U.S. Securities and Exchange Commission issued an emergency order to enhance investor protections against "naked" short selling in the securities of Fannie Mae, Freddie Mac, and primary dealers at commercial and investment banks.

The SEC's order will require that anyone effecting a short sale in these securities arrange beforehand to borrow the securities and deliver them at settlement.

In addition to this emergency order, the SEC will undertake a rulemaking to address these issues across the entire market.

"The SEC's mission to protect investors, maintain orderly markets, and promote capital formation is more important now than it has ever been," said SEC Chairman Christopher Cox. "[The] Commission action aims to stop unlawful manipulation through 'naked' short selling that threatens the stability of financial institutions. We will continue our vigorous commitment to investors by working within the SEC and in close cooperation with our regulatory counterparts to promote the continued health and vibrancy of our markets."

The Commission's emergency order, pursuant to its authority under Section 12(k)(2) of the Securities Exchange Act of 1934, will be effective at 12:01 a.m. ET on July 21, 2008, and will terminate at 11:59 p.m. ET on July 29, 2008.

The Commission may extend the order to continue it in effect thereafter if the Commission determines that the continuation of the order is necessary in the public interest and for the protection of investors, but for no more than 30 calendar days in total duration.

* Marc B. Hankin and Heather D. McArn Join Jenner & Block New York------------------------------------------------------------------Marc B. Hankin joined Jenner & Block on July 14 as a partner in its New York office.

Mr. Hankin had been counsel in the Bankruptcy and Reorganization Group of Shearman & Sterling in New York City. He had worked at that firm since joining as an associate in 1994. Between 1992 and 1994, he was a law clerk for Chief Judge Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York.

Among his clients have been Spiegel and Eddie Bauer in their Chapter 11 cases; Citigroup in connection with Dana Corporation's Chapter 11 case; and HSBC Bank USA in connection with many subprime mortgage originators.

Mr. Hankin received his J.D., with honors, from the University ofConnecticut School of Law in 1992 and his bachelor's degree from Yale College in 1989.

Ms. McArn completed a clerkship for Judge Arthur J. Gonzalez inthe U.S. Bankruptcy Court for the Southern District of New York. Between 2004 and 2006, she was a court advocate for victims of domestic violence in Birmingham, Alabama.

Before that, Ms. McArn was an associate for several years in the Bankruptcy and Reorganization Department of Paul Weiss RifkindWharton & Garrison in New York. Between 1994 and 1996, she was a law clerk to Chief Judge Lifland in the U.S. Bankruptcy Court.

Ms. McArn received her J.D., cum laude, from Vermont Law School in1992. She received a master's degree in urban planning from Columbia University in 1988 and a bachelor's degree in political economy from Tulane University in 1986.

Mr. Hankin and Ms. McArn are the second and third bankruptcy lawyers to move to Jenner & Block this year. On Jan. 1, 2008, Patrick J. Trostle joined the Firm as a New York partner.

* Stuart Gollin Joins Willamette as Bankruptcy Practice Director----------------------------------------------------------------Willamette Management Associates named Stuart A. Gollin, Esq. as the firm's principal and director of the firm's reorganization and bankruptcy services. Mr. Gollin will be based in the firm's New York office.

"I am excited to join a firm that is the caliber of Willamette," said Gollin. "Willamette has an excellent reputation among corporations and financial professionals alike."

Mr. Gollin will be working with clients in providing services such as business turnarounds, bankruptcy and insolvency, litigation support and forensic accounting, finance, mergers and acquisitions, structuring and restructuring of financial instruments, financial accounting and reporting, SEC matters, and financial planning and control.

"Corporate bankruptcies are usually very complex," said Bob Schweihs, managing director. "Stuart, an expert in this field, will be able to help our clients navigate this difficult process to reach a successful conclusion with their transaction or litigation matters."

Known for its independence and the thoroughness of business valuation analysis, Willamette analysts have been involved in a wide range of financial and valuation related issues. Both domestically and internationally, courts have relied upon the expert testimony of Willamette analysts.

Prior to joining Willamette, Gollin was partner in charge of bankruptcy and insolvency at a regional accounting firm.

Mr. Gollin received a B.B.A. in Accounting and Economic Statistics and is a CPA and a Certified Insolvency and Reorganization Advisor (CIRA).

Founded in 1969, Willamette Management Associates -- http://www.willamette.com/-- is recognized as a premier professional services firm in the disciplines of business valuation and security analysis, intangible asset and intellectual property valuations, forensic accounting, economic damages/lost profits analysis, and financial advisory services. With offices in principal cities across the country, we serve clients nationwide. Our clients range from substantial closely held companies to multinational corporations and include the banking industry, the accounting profession, the legal community, and government and regulatory agencies.

Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition of the TCR.

For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852.

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